Mises Economics Blog
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In The Pipeline
Fall of the State
The Value of Face-to-Face Service
When I got the news my car wouldn't be built right before I left for vacation, I decided it was worth looking for a vehicle in Iowa. I didn't think I'd find one close to my options (and I didn't), but at least I got to see a blue one in person and to see the spoiler option in person. I like the color. The spoiler is a joke.
The ideal situation would have been to find something buyable while I was on vacation so I could take advantage of the employee discount offer while it lasted. (GM extended it, so my hurry didn't matter.) Getting the vehicle back to Oregon would have been a hassle, but still worthwhile.
I mention all that as background. When I was sure I wouldn't be able to find a 2005 and would need to order a 2006, I knew I wouldn't be getting a car until September at the earliest. What to do with the wad of cash in the bank? "Put it in a CD, of course," I told myself. And I did. Thousands of miles from my branch, I did it online. And then I noticed something unfortunate.
My CD was for a very short term (63 days), so it wasn't getting a great interest rate. I was actually getting a better interest rate in the money market account I funded the CD from! I sent a message to customer support explaining what happened and asking them to cancel the transaction. I never got a reply, and they didn't do it… wonderful support.
Today I visited my branch. I've been banking there for over six years. They recognize me when I come to the branch, which is about once a month because I don't use ATMs. (I don't have a cell phone either — yes, I'm old-fashioned.) I told them what happened, and they fixed it. They waived the penalty for closing the CD (itself approximately equal to the difference in interest between the CD and money market) and instead of putting my money back in the money market account, they did something better. Bank of America is offering a 9-month "risk-free CD" that has no early withdrawal penalty and has a substantially higher interest rate the money market account.
This is great. It's a a better interest rate than I expected (2.81%), and I can still spend that money on my new car in September!
This happened because I went there in person. I couldn't have done this with their online banking services. Their online banking customer service didn't even acknowledge my message, but their "personal banker" exceeded my expectations. She knew I worked for Intel, and we had a friendly conversation about it. She even asked if I knew Glenn Hinton (I do) — it turns out she knows him from a church she used to go to.
My long relationship with this bank and personal visits to the branch are worth real money. I estimate the changes will net me an extra $50 by the time I buy my car. The bank had no obligation to treat me so well, but they did, and I thank them for it. Not just online of course — I thanked my "personal banker" in person.
Then I immediately drove over to a competing bank who gave me $75 for opening an account with them a couple months ago. My $75 incentive had arrived. The teller there was pleased that I had actually been using my account, unlike a lot of people who only opened it to get the $75.
You bet I've been using the account. Sure, I could have taken advantage of the incentive. But I want this bank to like me, too. It might be worth an extra $50 to me someday!