Adventures in Consumer Complaints

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English: Stearns lawn mower - Made in Syracuse...

English: Stearns lawn mower – Made in Syracuse, New York – 1934 (Photo credit: Wikipedia)

 

If we’ve spent any time chatting you’ve probably guessed that I’m fairly frugal or at least trying to be (we all have our exceptions). Provided there’s a legitimate grievance, I think it’s good financial and consumer behavior to complain about poor services or products. I also think it provides valuable feedback to the practitioner or manufacturer. I don’t mean sending a wine or restaurant dish back because you don’t like the taste—but send it back if it’s spoiled or over-salted or cold when it should be hot. I don’t have a problem with returns if the business model demands it—like online shoe purchases. Many people complain illegitimately, but many people don’t complain at all. Sure it’s a pain, and sometimes the magic works and sometimes it doesn’t, as they say. Here are two recent experiences to illustrate the perils and worth. I make the mistakes so you don’t have to.

I need a new lawn mower, as you will agree if you’ve been here recently. After five years of struggling to be ecological with a mechanical push mower, I’ve decided it’s a lot less time consuming to go to the gym than to spend two hours cutting a few inches at a time. I researched mowers with Consumer Reports and to my delight found the one I wanted available online at both Amazon and Home Depot for the same price (no driving around for an entire Saturday). However, because dear daughter has Prime, Amazon was offering to deliver it within two days (that grass is really high) whereas Home Depot was going to take about 10 days. I ordered it from Amazon. Big mistake. Amazon used UPS as a carrier, and they dumped the 91 lb. package at my gate (blocking entrance) while I was out for the afternoon. It poured rain, soaking the box. In addition, it looked like gorillas had played polo with the carton.

I called Amazon to notify them that I would not accept a damaged and soaked electronic item that had a limited warranty, since if past experience is a guide, it will go kaput days after the warranty expires. They informed me that they would not pick it up because it was a hazmat item due to the battery. While they’d send another one, this one was my problem to dispose of (!) I’m not quite sure how I’d wrestle a dripping wet and falling apart 91lb. box to whatever hazmat disposal site exists in Chicago, but you can probably imagine that the conversation went somewhat south. That was 5 days ago. They decided to make a “one-time special exception” and send out a disposal service. I have still not heard from the hazmat disposal and to frost the cake, UPS delivered the second one right next to the first one, out in the yard. At least until I called and they sent the guy back to re-deliver it to the house. Finally, upon reading the warranty, I discovered that in order to exercise the guarantee, you have to return the machine to where you purchased it, or to a Black and Decker repair center, including shipping.  I’m not going to analyze how much time I’ve spent on the phone on this one, because for a $300 item there was nothing else I would have done. But my moral for the story is that if you are thinking about buying large electronics or machines that are likely to need servicing, well, I’ll think a long time before I buy them on Amazon again.

My other experience was delightful. I’m a huge fan of Craftsy and I do feel somewhat guilty about the money I spend, although as entertainment goes it’s not much more than going to the movies. Recently I anted up for 2 more classes, and 2 days later got a promo for the same classes for a total of $25 less. I complained and received a response with a coupon for TWO free classes (worth far more than the $25), and an explanation that they guarantee their prices for 30 days if purchased through them (I had used the Apple app, where I got charged tax). Sometime ago I had complained that the cost of essential materials (over $250) should have been disclosed before the class, and they refunded the entire class fee, although I’d assured them there was no problem with the actual class. And finally, some time ago they just sent me a free class to thank me for my patronage. It’s not a publicly traded company, but if it ever is, I’d be really tempted to take a hard look.

 

Student loan forgiveness—is it possible?

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No doubt about it, student loans have become a crushing burden on young adults. Sure, we older folks can be all self-righteous and make speeches about how we put ourselves through college—I did, both college and graduate school. I don’t believe it’s possible any more—what a student is able to earn summers and part-time will not be the $30,000 or so that is needed to attend a year at the University of Illinois. Forget the $60,000 needed at a private school. Even if you could do it, I’d hate to see your grades.

Yes, of course there’s the extraordinary student who can put together a scheme to spend two years at a junior college, start a business on the side, etc., etc. That’s not my kid, probably not yours, and it’s not do-able public policy for how to go through college. I’m not even going to get into how the Europeans have it so good, because I’ll only start frothing at the mouth. Queue up the methods of loan forgiveness.

Actually, no. If you want to know about how you can work for a non-profit for 10 years and get the remainder waived at the end, read this. For certain mostly health-care professions, you might be able to unload the Perkins loans this way.

I doubt anyone has actually had their loans cancelled in these ways. If you have, I’d like to talk to you.

Here are some reasons why I think you need to be extremely careful about depending on these programs for a solution to your debt. No such thing as a free lunch and you’re going to jump through a lot of hoops and there’s a pretty good chance they’ll still get you in the end. So be careful:

The non-profit repayment is only good for money you borrowed under the Ford Federal Direct Loan program. Perkins loans and others can be consolidated under a Direct Consolidation program, but all the payments you made before you consolidated will not be counted towards the 120 required payments (10 years). No payments before October 1, 2007, will be counted. So as far as I can tell, NO ONE yet has had their loans actually forgiven.

The Perkins loans are often the smallest of your loans, because the limit per year is $5,500 for undergrads, $8,000 for grads, and an interest rate of 5%. Even if you were granted the limit (and most people aren’t granted the full amount), getting this forgiven may not help you much.

Being chained to working for a non-profit for many years may cost you more in lost salary and promotion potential than the loan forgiveness is worth. It may not seem like it for a year or two, but the forgiveness for public service is because public service may pay so low (and have low promotion potential) that no one with loans could afford to work in it.

You must be fully employed in a non-profit. Want to take time off to have a baby or stay home with a child? Uh-uh. Get fired? Quit an untenable job? Get reduced from full-time to part-time? Your forgiveness evaporates. You are now responsible, again, for the full amount of the loan (even though your earnings for some part of your career were lower by working for a non-profit).

Income based repayment is another option that has some hidden consequences. If you’re drowning in the amount of loans in relationship to your salary (or lack thereof), you will probably look into it. This is probably a situation where you would be considering bankruptcy if those loans were anything but student loans. However, don’t get married. If you do, family income will be taken into account and unless you file separately (costing the higher earning spouse a nice chunk of change in increased taxes) you may lose eligibility. You will also pay a lot more in interest under these plans (for 20 years) than you would under a standard 10 year payment plan.

In most cases, your energies would be better focused on making a financial plan that includes job strategizing, spending reduction, and minimizing living costs.

These plans have been touted as relief for student borrowers crushed under our now-outrageously inflated college costs, as if they are some kind of get-out-of-jail free card. I wonder if anyone can actually use these programs, or if they’re just window dressing with some pretty heavy penalties.

 

 

 

Is “good enough” the secret to wealth?

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Cover of "Joy of Cooking"

Normally the Wall Street Journal starts touting tech innovations three months before they’re on the market, and then spends the next three months reviewing how they don’t work quite right. Got to keep that market churning, no? But two recent articles about trends have me amused and bemused, and I think they relate to how much dough you hold onto.

 

The first one was on how people are not replacing their electronic devices as fast as they used to. Basically, after the initial kinks are worked out (and that time span is getting shorter), electronic devices pretty much work. As long as there’s not a major change in the operating system, many people can put up with occasional crashes and slow response, especially since there’s no guarantee they won’t experience those same issues with the brand new device. I can see this with my own experience with e-readers. I stood in line one Black Friday to purchase an early Nook for $100 back in, I think, 2010. It was good for about a year before I got tired of the torturous internet connection, as soon as I discovered that links and the ability to research something online that I’d just read about was one of the chief benefits of e-books. In December of 2011, I purchased an iPad 2 and I haven’t replaced it yet. I did bash the screen in, but when I thought about replacing the whole thing, I decided I could live with it by spending the $100 or so to replace the screen. It was just good enough—even though its crash rate has gone up since various iOS updates.

 

My cell phone contract is up next month, and I’m thinking over whether I’ll replace my iPhone 5. It works just fine, but if I don’t, I read that I’ll still be paying for the same phone over the next contract, and I hate to pay twice for the same thing. My desktop dates from who knows? 2010? 2011? I used to assume computers were good for 3 years, mostly because of operating systems and updated software not working on old ones, but right now I’m not seeing any problems. Still, at some point I’ll probably switch to an all Apple system.

 

What’s the financial planning point? Well, things have changed. I used to fantasize about being an early-adopter—one who was always the latest with the greatest. In fact, I lusted to be able to afford the $2,500 Macintosh back in the 80s. But I’ve seen enough computer history to have learned that 1)the price comes down in 2.0 and 2) 1.0 usually doesn’t work very well. So being an early adopter is a little bit like lighting a cigar with a $100 bill—fun and flashy but a waste.

 

Lately I’ve seen the same thing with cars. When I was a kid, many people replaced their cars every two years, the more frugal waited five, and you were driving a rust bucket heap with fenders flapping by ten years. Then cars just got better. My clients routinely drive cars that are ten years old, with the oldest one so far a 1989. Virtually every one of these people could have bought any car they wanted.

 

Besides the fact that at least some devices seem to be better made and last longer (hear that, clothing industry?), I think a lot of people (my hand is up) simply hate the research required to buy a complex device, and in the case of cars, the overwhelming feeling that you will be taken every time. .That especially, and the fact that I have a kid in college, keeps me driving my 2002 Subaru.  It’s very easy to just keep putting it off until you have a complete breakdown. Consumer Reports has an interesting scale on fix vs. replace—if the fix costs more than 50% of the value of the car, replace. When I think about the cost of a couple of months of car payments (or the sticker on a new car), fixing has won so far. For other things, check the warranty! My daughter recently picked up a $300 set of Bose headphones from the free box at her college—they were still under warranty and she had them fixed for $100 (apple didn’t fall far from the tree).

 

Finally, this morning WSJ had an article on trendy food. There’s not much I won’t eat (lima beans and jello mold), although my daughter reserves a special circle of hell for kale. But I’m always stunned by food trends. Local and organic make sense to me based on quality and taste. But pot roast out and pan-sauced chicken breasts in? No one eats turkey tetrazzini anymore? People aren’t ready for Moroccan sauces?  Jeez, if it tastes good, it tastes good, and I don’t care if my mom used to cook it in 1957. It always stuns me that when I make a moron-level cake from the Joy of Cooking, people rave about the taste. In fact, lately if I simply make a cake from a box, people rave about the taste because all we are ever served nowadays is ersatz cake product from Sam’s, Jewel, or Costco. Years ago I was stunned to learn that éclairs never have actual custard filling anymore, because they’d have to be kept chilled. I never look at Facebook that some friend hasn’t linked to the latest hype on what we should eat, what precise method of exercising is best, and please god save me from all the vegan mumbo jumbo.

 

What I chiefly object to is that once it’s trendy, it becomes way more expensive. Ask my dog—she USED to enjoy chicken wings. We have no idea what’s seasonal anymore (hint, it’s usually what’s cheapest) and cooking shows are entertainment not instruction (except for my beloved Jacques Pepin).

 

Okay, before I rant on for several more pages, let me summarize the financial points I’m making:

 

  1. Save yourself time, money, and aggravation by being slow to adopt the new
  2. Fix it when it’s broke, as long as it makes financial sense
  3. Try to resist hyped trends. They’re making a fool of you.
  4. Don’t keep up with the Joneses. They don’t have any money saved for retirement.

Grumpy cat will now return to her regularly scheduled programming.