Governance of tax issues for directors

I’ve just run across this nice cheat sheet by the ATO – a tax governance guide for directors of large companies. It’s got some handy hints for directors of smaller companies as well. I maintain that at least one person on each board needs to understand this stuff well, and that everyone on the board should be asking similar questions to those on the ATO’s list.

The first issue is how to ensure that your organisation has the accounting and control mechanisms needed to handle day to day tax and reporting requirements.

The second is about how to ensure tax is properly considered as part of board and corporate decision-making processes for major financial transactions, overall corporate strategies and when seeking or considering tax advice.

Never buy the Warranty: Repair it yourself

This is the second in a series on Warranties – the first was Never buy the Warranty – Repairing is cheap

So now let’s look at the option of self-repair.

These days most people have never learned how to take things to pieces and put them back together again. But that’s pretty much all the average service center does – run a diagnostic, remove and replace the affected module and test to make sure everything is ok.

The main logic board from my MacBook Pro in the previous post was replaced as a unit, rather than the removing and replacing the  handful of  affected chips. While the replacement chips may be very cheap, removing and replacing surface mounted devices on a modern printed circuit board is not easy. It is difficult to  ensure the quality is consistent across the service network, but most importantly it is much quicker for the service centers to simply swap out the board. So service centers take the more efficient but far less sustainable and cheap approach.

In the PC software world it is the equivalent of “delete everything and reinstall Windows” – it’s easy to do and takes very little time for the service center. In the automobile world it’s when they replace the entire lamp unit for $500 rather than plastic welding or replacing the cracked lens for $10.

This approach works well for the customer if they have little time and lots of money, or if the are covered by a warranty. That unfortunately is not always true – warranties often do not cover common reasons for failure (try driving your car into a tree and claiming on your warranty), they expire and they may apply to a different geography.

Let’s take some examples where there was lots of time, and little money – and no warranty.

I was motorcycling in Pakistan, and met up with a chap who I’d been chasing since Istanbul. It seemed we both liked traveling rather quickly, and it would be good to share a road. We met near the top of the Karakorum Highway, where Pakistan borders with China – that’s me on the while F650ST.

On the way back to Gilgit, my new friend’s gear change mechanism broke. This wasn’t the clutch – but a very complicated piece of metal that connected the lever that you use to change gear with your foot to the gearbox itself. It was a forged piece, beautifully designed and manufactured, and clearly very expensive to replace. We were also in the far reaches of Pakistan – a long long way from Germany.

We were not concerned – I suggested that we ride to Gilgit and there he could probably find someone to replicate the part – in function if not in quite the form. Luckily he was in 2nd gear and on a very capable 1100GS – and we were able to continue zooming back. When we got there he managed to not only find someone to make the part, but it was done within a day and for just a few dollars. It lasted for the remainder of his trip.

In South America I had a few similar experiences, though nothing so dramatic. Once again something broke – this time one of the not-so-structural but still very important frame bolts on my bike.

It was going to be tough to replace, but when I walked into Moto Pablo – I knew I was fine.

You may laugh – but that chaotic workshop was a sign that the folks that work there could do anything, and indeed they did. They won’t win any 5-S awards for work layout, and their HSEC standards were a little dubious:

But it got fixed – and it stayed fixed.

But let’s move on from the gratuitous motorcycling shots, and to a more topical example. While, err, motorcycling in South America, I carried a Dell Laptop. It was a reliable beast, even in the vibrating bike, but one time I placed it into the boxes the wrong way (next to the bolts), and next time I turned it on the screen was dark.

That meant I had to either connect to an external monitor or pretty much go off memorized keystrokes to save all my photos. After a little investigation online I determined that the Cold Cathode Tube that lights to screen had most likely broken. I took it all to bits, and sure enough that was the case. The normal approach when this happens is to replace the entire screen – a very expensive proposition, especially for a computer that was riding around in the back of a motorcycle for two years, and thus liable to break at any time.

So when I got to Mendoza, in Argentina, I ordered a replacement tube, and when I returned a bit later it had arrived. This time I got expert help from a local dealer – and he took it to pieces, replaced the tube (ok – I was hovering a bit) and voila – it all worked. He also replaced the hard disk drive, which, not surprisingly, was beginning to sound like a tractor.

Here we are after the event – me with the husband and wife team. They were amazing.

It cost a relatively trivial amount, but it did take a lot of time to sort out. The hardest part was finding someone to send the part to – and that was these guys.

I’m close now to an excuse to put in one of my favorite photos, so let me reiterate the overall point – if the warranty is expired, and the cost of repair is extraordinarily high, then do it yourself. If it’s too complicated for you (and you should really just try pulling it to pieces) then find someone unofficial that can do it for you.

Here’s round the worlder Tiffany doing some running repairs to her bike Thelma – a frighteningly common occurrence. The bolts that hold on the cover in her hands eventually ripped away from the bike, and so she subsequently had to get a grizzly old man in Cordoba to make more permanent repairs, but she kept the bike going for thousands of miles before that.

You don’t have to have a fancy workshop – Tiffany is on the street in the above shot, and Mamasita (as we called her) on the Salar de Uyuni trip I followed on my bike managed to feed about 15 of us each night with delicious 3 course meals – and this was her kitchen.

I have no excuse for this photographic journey through prior travels while discussing warranties. It’s just that I was sorting through old photos today. However the examples are salient, and the points are clear:

1: First try to fix it yourself - the internet is a remarkable source of answers to almost all breakdowns, and taking things to bit is fun.

2: If you fail to fix it then go to a dealer. Ask them to look at it, but don’t spend too much, and walk away if their quote is too high.

3: If the dealer quote is high, then find the cheap unofficial alternative. If you are lucky enough to be in a third world country then this will be easy. If not then look for young and old people that like tinkerng – they have plenty of time and curious minds.

4: Most of the time the repair can be cheap. If it isn’t then you are probably doing something wrong, or it’s just beyond fixing and time to buy again. If you cannot repair it then at least list it on Trade Me or eBay  – there may be someone out there making a business of buying broken widgets, fixing them and selling them on again.

In the process of getting a product fixed we should always keep in mind the replacement cost. If the unit is cheap then you may skip one or more steps, and just replace and move on. It’s not the most sustainable thing to do, and you miss out on the fun of trying to fix it yourself. But do make sure you give someone else a shot at repair by selling or placing it in a recycle facility.

In the next Never buy the Warranty piece I’ll discuss the cost of those warranties. I think you know how that will turn out.

Never buy the warranty: Repairing is cheap

Well done Magnum Mac Wellington

My MacBook Pro 17 died on Friday.

It failed to restart after running the software upgrade for the magic mouse. I tried the usual tricks (Apple has a good knowledgebase) and then twittered the failure and headed for Magnum Mac, Mac in hand.

I’ve been there plenty of times, but never to the service department. The wait was short, but painful – any wait when you have a broken computer in hand is painful. Meanwhile the lazyweb (Twitter) was responding, and I not only did I have a likely diagnosis (thanks @johnclegg – dead main logic board) but also a pointer to someone that could replace it for cheaper than the apparently $2,000 I was up for (thanks to @gnat).

I paid Magnum Mac $60 for the mac to be looked at, and another total of $120 (all +GST) for priority service. I fully support the ability to jump the queue by paying more – it’s a simple way to both price discriminate and to differentiate those customers that really are in a hurry from those who can make do. It’s also under-used by everyone. Why can’t I pay more through an 0900 number to get an immediate and local answer to my customer service calls to Telecom or Vodafone?

Priority service meant my mac would get looked at within the hour – important on a Friday at 12:56pm. The tech suspected it was a stuffed board, and put me onto their text service, whatever that was.

I soon found out – with the first text at 1:19pm – the repair status was “in Progress” apparently. That was good.

At 14:25 the next text came in – the repair status was now “waiting on parts”. I called immediately – not wanting to drop $2,000 on parts.

It was great news – as it turns out that my computer was one of those affected by the NVIDIA graphics chipset issues, and the replacement main logic board would be for free. Even better, the part would arrive on Monday.

At 10:57 today, Monday,  I received another text – “in Progress”, and at 12:00 I got the “Completed” text. I picked it up and was up and running immediately.

Total elapsed time was less than a working day. That is simply stunning, and a huge turnaround from the service levels of the past.

Total cost – $202.50 – less than the Applecare cost, of which more shortly.

Lessons for service providers

Offer a premium service to customers in a hurry and/or with more money. Why can’t I pay more through an 0900 number to get an immediate and local answer to my customer service calls to Telecom or Vodafone?

Deal with repairs quickly – get your systems and processes right and you’ll get the fixed products back to customers within the day. That makes your costs low, customers happy and for a happy work environment.

Find a way to make it free – or at least cheap. That means working the claims for the customer, sourcing better parts for cheaper and employing technical staff that are great at what they do so they can do it efficiently.

Lessons for customers

Go to the professionals. Just as with my BMW motorcycles I went to a service center that specialises in the products. For BMW that might mean an aging guy in a tiny garage in Mendoza, Argentina, or the Auckland’s Experience BMW. For Apple it meant first trying the local dealer.

Know your rights. In New Zealand it is simple – the Consumer Guarantees Act states:

Goods must be:

  • fit for the purpose they are made for
  • safe
  • durable – last for a reasonable time
  • have no minor defects
  • acceptable in look and finish.

It was well past the purchase date, but it turns out that Apple sold a product that was not fit for purpose or durable  – it didn’t do what it said it would on the box for long enough. That meant they were liable under New Zealand law, and under the US system of lawsuits, and that customers would not have to pay for a fix.

Check the manufacturer warranty. Apple covers all of their computers for a year – for free. For me, and from what I observe, for others, computers either work out of the box or they fail fast. If they work for the first month or two then, viruses and dropping accidents aside, they are likely to keep going forever. (This does not apply to media drives, but then you should be replacing those regularly anyway.) So you can take your computer home with confidence, knowing that under NZ law and probably the standard, free, warranty you can return it for repair.

Make noises. The NVIDIA issue was ignored by Apple for a while, but eventually the sheer weight of dissatisfied customers forced their hand, and they settled with NVIDIA and offered the free replacement program. Similarly you can make noise – either by adding your voice to the others, by twittering, blogging and doing wharever people do on Facebook, or by getting a little more personal in store. Be reasonable and polite, and give the vendor the chance to make amends.

So I was lucky – the main logic board was covered by the settlement and replacement was free. As a mac fanboi I’m obliged to say that it was only the high quality of Apple’s product that kept it going for so long in spite of NVIDIA’s flaw, but then that would be asking for another failure. So instead I’ll mention that I did have an alternative, non-official, service provider. I didn’t use him, so my next Never buy the warranty post will be about another experience that I had – in Mendoza, Argentina.

Be good and be different – but do it the right way

I’m reading Zag – a little book with the thesis that to succeed you not only need to be good – but you need to be different from everyone else that is good. It’s a nice way to look at things.

Unfortunately for author Marty Neumeier he picked one bad example – a hazard when you write any business book to be sure:

So when my local bank bought a fifty foot outdoor poster emblazoned with the tagline “Nice. Since 1878,” they’d have been better off putting their money in a savings account.

Citibank positioned their bank as the anti-bank with the tagline “Live Richly,” and headlines such as “For a guaranteed return on investment, try buying flowers

Ouch. Citibank has since hit the wall hard, and a “nice” bank is very hard to find these days – especially in the USA.

Citi’s greed-oriented slogan was always bad – not just now, but when the book was published in 2007. Who wants to bank with someone that is encouraging its customers to blow money? It’s not a good look, and it was a pointer to gaps in the values of Citibank – gaps that ultimately resulted in the collapse.

It’s a lesson we can all learn from – being different and being good is not nearly as important as doing business in the right way and for the right reasons.

Incidentally – the Zagbook website is well worth a look – a great example of book promotion. It’s missing the vital component though – the ability to interact with the author.

A lesson in volatility

This year to date my US-based stock portfolio is up 44%, well above the benchmark S&P500:

Yippee!

Actually – not so fast.

Last year my highly levered (lots of options) portfolio went down a stunning 66%. I got caught out selling my shorts too early (I was short Citibank amongst others) and bet on the market turning around – and it didn’t.

Now I did withdraw money along the way, so things were not so bad,  and I’ve always looked at this particular portfolio as play money. But that last quarter hurt – no doubt about that.

What really hurts is how much effort it will take to get that back. Even after the excellent performance year to date, $100 invested in my portfolio at the beginning of 2008 would be worth only $49.

Money I have with Gareth Morgan investments in the meantime has lost 13.6% since September 2006 – or 4.4% per annum. That’s a lost better return than the S&P500 and my own portfolio. My instructions to them were for a growth portfolio, and while they lost a bit initially they have toed a very conservative line since. I’d like to see a bit more Berkshire Hathaway in there though.

Goodbye Trade and Exchange

Michael Carney picks up that Trade and Exchange has finally given up on publishing in print. They ceased to be relevant a number of years ago, and will not be missed today.

However Trade and Exchange were the Trade Me of their day. They seized an opportunity to grab and extend the classifieds market away from newspapers, and in doing so created a large business and a headache for the papers.

Then Trade Me then seized the opportunity to grab and extend T&E’s business, and finally Fairfax completed the circle when they purchased Trade Me to get their old line of business back.

On the way through T&E and Trade Me the classified’s business grew tremendously in size and usefulness, to become the e-commerce engine of New Zealand.

There are a number of lessons to be learned:

  1. Don’t be afraid of destroying your own business by launching a new one. If you don’t then someone else will.
  2. If you accept that you are not capable of destroying your own business, then pull out your check book when it looks like someone else will. Once you have purchased them then leave them alone and let them grow independently of your own systems and processes.
  3. Know when to lose – exit a market when you stop making money, and not a moment before of after.\


(disclosure – I’ve consulted Trade Me, Fairfax and WAN’s Quokka)

Guest Post: Glen Wiggs on Minimum Pricing of Alcohol

Another post by my father Glen Wiggs. In this one he refers to a Scottish study where imposing a minimum price of alcohol did nothing to reduce sales of ready to drink products (sold to younger folk), but did reduce spirits, wine and beer sales. So the older voters get to drink less while the newbie votrers still drink the same

More on Minimum Pricing of Alcohol

The Scottish Government is determined to introduce minimum pricing of alcohol where there would be a minimum price per standard drink unit of alcohol There have been two significant studies by The University of Sheffield. The United Kingdom Department of Health commissioned the first and the Scottish Government commissioned the second. These studies are being used by the Scottish Government to justify the introduction of minimum pricing. The Scottish Government is also keen on a discount ban. The New Zealand Law Commission are giving strong consideration to both minimum pricing and discount bans in their review if the liquor laws.

The second University of Sheffield study, which was released a month ago, http://www.scotland.gov.uk/Publications/2009/09/24131201/0 assessed both the impact of discount bans and minimum price on consumption. The study used epidemiological and econometric models and therefore in the formulation of the models made a number of assumptions. The conclusions are therefore theoretical and it would it would be risky to base policy on the study.

The study claims that there would be a reduction in consumption in different types of drink in different proportions. Page 76 has a graph with examples, which is reproduced.

U sheffield

A 70p (about $1.60, which would make the minimum price for a bottle of Heineken $2.08) per unit minimum price with or without a discount ban is estimated to reduce spirits consumption by 40%, beer by 10%, wine without a discount ban by 17% and with a discount ban by 20%. But note that there would be virtually no reduction in consumption of RTDs. We question whether this is a desired social outcome as RTDs are popular with younger drinkers.

In the 2007-08 ALAC Alcohol Monitor 35% of drink types consumed by youth 12-17 were RTDs, but of youth Binge Drinkers 51% drank RTDs. A minimum price policy is likely to incentivise young drinkers to drink greater numbers of RTDs. Clearly a minimum price policy in New Zealand is likely to increase inappropriate drinking by youth rather than curtailing it.

Glen Wiggs

Director

Foundation for Advertising Research

Adjunct Professor of Advertising Regulation

University of the Sunshine Coast, Queensland

Excess pay and excess bloat

A nice juxtaposition – this Sydney Morning Herald article reporting complaints about former Fairfax senior execs earning too much in payouts is accompanied by a video ad.

I think Sankar and David’s payouts were justified – and that shareholders should be questioning why they were pushed out. They were the people behind the Trade Me deal and understood the transformative power of the internet. The current regime has a ery old media flavour to it, which will help streamline the newspapers, but what will happen to the digital assets?

A warning sign for those digital assets could be the video advertisement on the smh.co.au website. Video ads may pay a bit more, but they are a great way to put folks off your site. Use them with care or preferably not at all.

So is the video ad a sign of usability taking a backward place versus demands for revenue?

Perhaps not – this particular ad was for MyCareer.com.au – another Fairfax property.

It’s all wrong.

Let me buy stuff Apple

A rare mishap on an Apple site – this the Store.Apple.co.nz site. I would like to buy the new mouse, but when I try to view the cart I get this. Tonight is the second time I have tried.

Alcohol minimum pricing – Reversing the Facts

A PRESS RELEASE FROM MY DAD. Plenty more to come on this topic I feel

Website: www.ffar.org Email: gwiggs@ffar.org
Media Release
Box 776, Noosa Heads Queensland 4567 Australia
ALCOHOL MINIMUM PRICING – Reversing the Facts
The Scottish Government is actively pursuing the introduction of a policy of minimum pricing for alcohol. The proposed minimum price would be 40 pence per unit. The Chief Medical Officer of Health for England also supports a minimum price policy and suggests a minimum of 50 pence per unit but this has been firmly rejected by the Prime Minister.

In Australia the Preventative Health Taskforce (PHT) has recommended the development of “the public interest case for minimum (floor) price of alcohol to discourage harmful consumption and promotes safer consumption.”

In New Zealand the Law Commission favours minimum pricing and says in its report “Earlier this year, Professor Sir Liam Donaldson, the Chief Medical Officer for the United Kingdom [actually England], also recommended that a minimum price model be adopted based on research carried out by The University of Sheffield.”
Both the PHT and Law Commission favour increased price by way higher excise tax.
The rationale adopted by the Chief Medical Officer for England is set out in his Annual Report “There is a clear relationship between price and consumption of alcohol. As price increases consumption decreases, although not equally across all drinkers. Price increases generally reduce heavy drinkers’ consumption by a greater proportion than they reduce moderate drinkers’ consumption.” (Emphasis added) He based this conclusion on the Sheffield University study that was commissioned by the Department of Health. The same argument would apply if price were increased by other means such as higher excise taxes.
A research report by the Centre for Economics and Business Research (CEBR) analysed the University of Sheffield research along with other research. A study by Wagenaar et al (also cited by the PHT and Law Commission) covered much the same ground as the University of Sheffield study on the effect of an increase in price on moderate and heavy drinkers.
The CEBR study found, “Heavier drinkers are generally less responsive to price changes than moderate drinkers, in terms of overall consumption”. In technical terms “The elasticity of -0.21 found in the Sheffield study implies that a 10% general price increase across all alcohol products would only lead to a 2.1% reduction in alcohol consumption amongst heavy drinkers”. On the other hand the Sheffield study found that the elasticity of moderate drinkers is -0.47 which would be a 4.7% reduction in consumption. The Wagenaar study had similar results. The CEBR study prepared the following graph showing the two studies and clearly illustrates that the consumption reduction by moderate drinkers will be more than twice the rate of heavy drinkers.

So how could the Chief Medical Officer of Health justify the claim that price increases will reduce consumption by heavy drinkers by a greater proportion than moderate drinkers when the opposite is the case? It seem that the University of Sheffield data was misinterpreted. As CEBR observe, “Unfortunately this evidence appears to have been misinterpreted by the proponents of minimum pricing, including the Chief Medical Officer of Health.
This misinterpretation has had far reaching consequences with the Law Commission repeating the error, as has the PHT to a lesser degree.
The evidence is crystal clear. Increased pricing will have minimal effect on reducing consumption of the heavy drinker but far greater impact on the moderate drinker. Policy should be evidence based – not based on factual error.
Glen Wiggs Director
Foundation for Advertising Research
Adjunct Professor of Advertising Regulation
University of the Sunshine Coast, Queensland
16 October 2009

Why not switch to the BNZ Global Plus Cards?



ccselector.html, originally uploaded by LanceWiggs.

Technebish and Adam suggest I switch to that I switch to the Global Plus Platinum Card.

Here, straight from the BNZ website, is the comparison table between the Global Plus, Platinum (mine) and GlobalPlus Platinum cards.

They all show Air New Zealand AirPoint Conversion.

Why would the other two stay if the one in the middle is going?

An open letter to Air New Zealand

Dear Air New Zealand

Why are you walking away from the revenue provided by people with bank rewards programs – and stopping conversion to Air New Zealand Airpoints Dollars?

I refer of course to the recent notification by BNZ and other banks that they will no longer support Airpoint Dollar conversion.

It puzzles me I admit – as it would seem to me that the program would be 100% electronic and cheap to administer, that the extra money people place in to their Airpoints accounts would encourage them to buy significantly more flights – with both Airpoint Dollars and cash, and that the effort you have put into making the Airpoints Rewards program as good as it is – well it’s a bit wasted now isn’t it?

It also seems like a bit of a clunker of a move for an organisation that in recent years has been getting everything right. What gives? Are you launching a bank?

Please work it out with your former partners – all we want is our AirPoint Dollars back.

Looking forward to your reply

 

Lance Wiggs

P.S. BNZ, Westpac, ASB and Amex are still on the hool for their annual fees if this benefit does  go away.

An open letter to BNZ Credit Cards

To/BNZ Credit Cards
Wellington,
New Zealand

CC/ a few other folks.

Dear BNZ Credit  Cards;

I am very upset.

The other day I opened this message in my BNZ internet banking inbox (good to see the newer website by the way):

In this letter (which I assume you have also sent to my address, which I have not been present at for some time) you state that you are removing the ability for me to convert BNZ reward points into Air New Zealand Airpoints Dollars.

This makes me angry as the only reason I selected, and have stayed with, your range of cards is this very ability. Over the last few years I have found real value in the ability to convert reward points into something of genuine measurable and realizable value. It is a wonderful system.

You state in your letter that I will still be able to convert my Rewards Points into FlyBys. I am not, and nor will ever be, a member of FlyBys. It’s not that I don’t think they are an impressive bunch, it’s just that I don’t want to share my transaction data, and nor do I want the economic deadweight loss associated with applying points to a program where the potential purchases are selected for you. In simple terms the value of my airpoint dollars is known – it is $1 for each $1 reward – while the value of a FlyBys point is a function of my perceived value of the goods on offer – goods that I probably would not purchase with my own money.

As I mentioned – this made me quite annoyed. So I searched on my BNZ internet banking site for the terms and conditions of my credit card. I thought that clicking on the Credit Card and Personal Loans section would be the right thing to do – and so that’s what I did.

I expected (I’m kidding really – it was a forlorn hope) to see a range of options under that heading.

For starters one or two credit card offers that you had selected for me based on my transaction records. I’d simply click the find out more button for the one I liked, follow through a page or three of features, benefits and costs and then click the “accept” button to get my credit card in the mail.

The “need a loan?” section would be aimed at helping me into that new Mercedes or buy the house down the road. Or maybe a Hyundai Getz and a room in Taihape – but you get the idea. Once again it would be a simple process. I’d type in the make, model and VIN number for the car, select the dealer from a list and you would come back with an offer. I’d examine the T’s and C’s and then click accept – and the loan docs would go off to the dealer, and the dealer would drive the car to my place.

Similarly for the house – for that you just need the address, and you’ll calculate the valuation, offer me two to three loan options based on my transaction history, let me accept an offer and then offer to take care of the conveyancing for a flat fee. Then you’d liaise directly with the lawyers, the agents and counterparty to make it all happen. After all you are the ones making all the money out of this deal.

I’d also see, of course, the terms and conditions for all of the loan products that I currently have.

But, and you know this I am sure, all I saw was this:

I can add a cardholder (though that has an * attached to it) but I cannot see anything related to what products I currently have. You’ve also lost an incredible opportunity to offer me tailored products – so my cash and ability to borrow sits idle still.

So I logged out before you dumped me out and went off to your main website. I found the Terms and Conditions fairly easily to your credit, but they were of course all for new card applications. I assumed that they were the same as my existing card, but was a bit perturbed to find that I wasn’t quite as special as I thought I was:

It seems that there is a Limited Edition Platinum Visa Card as well as a BNZ Platinum Visa Card. I guess that I am normal not limited, but because I didn’t know I read them both.

They were identical – as far as I can see. I really did look, but they each referred to the both cards. There was one difference – a smaller font and no page breaks for the regular Platinum card – it felt a bit cheaper frankly.

Regardless, I scanned through the boilerplate to get to the salient facts. First you assert that you can change these terms and conditions at whim – with just two weeks notice. I guess your email was just that.

Next I noted that I can indeed change my reward points into BNZ AirPoints Dollars. That’s good. I’ve never seen an offer for a physical item by the way – but then I throw away almost all my mail, and only open what is left every two or three months.

But wait – further on you assert your right to withdraw from the conversion to Airpoints Dollars at any time:

Any time! That means you could do it now. or tomorrow. Or on the 9th of November, 2009.

So it seems you have yourself covered legally. And it seems I signed a contract that gives you the right to withdraw all of your benefits by merely giving me a notice.

But I’m not writing to you with a legal problem. I’m writing to you because I am struggling to use words and phrases that are acceptable in public. You see I am angry. (I think I said that already).

Fool on me it seems – I did read the contract but given that you could change anything anyway I trusted you to do the right thing in the future. But it seems that you did not.

Meanwhile it seems that your lawyers and accountants have not talked to your marketers. Go check out http://www.bnzplatinum.co.nz/. I’ll wait.

Actually I can’t wait – so let me run you through what I saw when I went there just now. It’s the marketing site for the Platinum card. See the text in bold?

That bold text highlights what you see as the principal benefit of the card – the Platinum Rewards. So let’s click on the Rewards tab and head to the BNZ Platinum Rewards page.

That’s kinda small – so let me zoom in on the bit I’d like you to read.

That’s right – not only are you are pushing the rewards points as the main feature of the card, but you also place the ability to convert your reward points to Air New Zealand Airpoints Dollars at the top of the list in the rewards page. Clearly it is the major benefit of the card, and sure enough, it is the only reason I got this card. I wonder how many others were in the same boat? 90% 95%??

There are other benefits – but they are amusingly bad. It’s probably better for all of us that I don’t raise them.

We are talking about fairness here, and we in New Zealand are famously intolerant of anything that isn’t Fair. So can I ask you to answer these questions for me?

  1. You are marketing a product for which you are canceling the principle benefit.  Why?
    Now I will give you credit for fixing the error on the page you get after clicking apply now (you really should fix that ugliness). But who is going to read all that text to figure out that you no longer offer Air New Zealand redemption? Where is, for example, the warning in red that states this is no longer an option?
  2. You have taken away the major (99% for this customer) benefit away from an expensive product. Seriously – it is expensive. By how much will you be reducing the annual fees?
  3. You imply that Air New Zealand has changed the game. Does this mean that AirNZ put the prices up for Air Points Dollars? Weren’t they always, well, $1 each? What actually changed? (I know this is really three questions, but bear with me)
  4. What other credit cards that you market have had the same removal of benefits?
  5. Are you aware that Platinum cards are the vanilla card of choice in the USA and that people in New Zealand that think Platinum has some kid of prestige are sorely mistaken?  (I know I know – just look at the state of their economy)
  6. Why did you change the design of the previous card – it was almost 10% white, and beautifully discreet. The new one has bubbles

OK – so those last two question not really that important – but I thought I’d take the chance while you were reading this and answering the other ones. You are reading this aren’t you? I hope so. I’d love to hear your replies as well.

I did like this product of yours, and I would be more than happy for you to ignore those questions above (except maybe number 6 :) and simply answer in the affirmative to this question:

Will you please retain the ability for Platinum (and goodness knows who else) cardholders to transfer Platinum Rewards Points to Air New Zealand Airpoints Dollars?

many thanks, and I look forward to your response

Lance Wiggs

P.S. Great job by the North end branch on opening my business banking account in about 12 minutes with a minimum of fuss.

P.P.S. I’d love to hear your side of this too Air New Zealand

The stupid American Express “prove you are you” policy

My phone rings – it’s a blocked call. I answer, and then a pause before I hear:

“Hello Mr. Wiggs

It’s so and so from American Express and this is a courtesy call. Can you please answer a question to prove that you are indeed Lance Wiggs?”

“Umm – can you please first supply me with some information to prove that you are from American Express?”

“I first need to get proof of who you are <paraphrased>

“But you could be anyone calling and trying to get my information?”

“I first need to get proof of who you are”

“I suspect you are calling because my account is overdue. I paid $xxxx it last night <now that I am back in internet land> – can you tell me at least whether that was enough?”

“I first need to get proof of who you are”

“Bye”

Clearly a frustrating call on both sides – the outbound telemarketing agent was constrained by some obnoxious rules and I was constrained by not wanting to give my details away to a potential scammer, but also not wanting to allow companies to engage in behaviour that could open them up to scammers doing the same.
Issues and how to resolve them

1: The American Express representative could not confirm he was in fact from Amex. He could have been from a bill collection agency, a scammer wanting to social engineer information out of me or indeed from Amex.

  • Show the correct caller ID when making calls to current or prospective customers. This could even be mandated
  • Tell the people receiving the call exactly who you work for – especially if you are from an agency calling on behalf of another company
  • Tell the customer something that American Express only would know to prove your identity
  • Abandon the “please prove who you are” piece, but only provide the limited information required by the call without further confirmation

2: My American Express account was overdue, and I did not know by how much. I was out of the country for 2 months, had lousy internet access, did not know my American Express website login/password as I never use the site and rarely use the card

  • Send me an email – saying you are overdue by $x and please pay (I assume you have my email address from the website login)
  • Send me a text – saying you are overdue by $x and please pay (I know you have my phone number – you used it)
  • Both those options are cheaper than a call, but the best thing to do is all three
  • Bonus – prove you are human and google me then contact me though Twitter, Facebook, Linked In etc. It really is not that hard these days

3: I used the American Express card to buy my AirNZ round the world tickets instead of my normal BNZ card

  • BNZ should increase the limit of my credit card to something representing more than 2 weeks of income. They should do this based on the amount of money flowing through my account and not by requesting proof of earnings.
  • BNZ should offer me more than one credit card – e.g. a Visa and a Mastercard – to separate personal and business expenses
  • BNZ should be sucking up to me in general given the amount of money that I pay and have with them

 

NZ Newspaper Readership Numbers

More Red Sea – this time the changes in circulation numbers for Newspapers. The charts show the difference in readership between 2007/8 and 2008/9.

Once again these are supplied by Roy Morgan. I’ve put the Sundays, which is once-weekly and not a daily average, into the same charts.

Click on the images for larger versions.

See also the Magazine readership charts

NZ Newspaper pct loss

NZ Newspaper num losses

NZ Newspaper pct gains

NZ Newspaper num gains

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Disclaimer These opinions are my own, and not that of any of my current or former clients.