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July 18, 2008
Handling fee, or manhandled?
Last week I bought a $50 gift certificate for my friend's birthday from her favorite day spa.
As the clerk filled out the certificate, I admired the spa's luxury surroundings. Finished, the clerk said the total would be $51.50.
"What's the extra $1.50 for?"
"The handling fee," she said.
"What kind of handling is involved?"
"Writing out the certificate," she said. "It's labor-intensive." A long pause. "Sorry, I don't make the rules."
Have you ever encountered a "handling fee" on a gift certificate, and what do you think of this spa's use of it?
UPDATE: The owner of the spa has responded in the comments. She says that the fee is for the upgraded gift certificate card and the employee didn't explain that there are card options.
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Crazy. I would have immediately expressed my dissatisfaction with the policy and walked out. I agree with one of the previous commenters who suggested giving the $50 as cash with a suggestion on where to spend it.
But here we do see the power of social media.
I've never been to Milk & Honey Spa (I do live in Austin), but I now have a bad impression of them, and will probably never go.
My wife is a frequent spa visitor, but now she'll ever go there now either.
And she'll tell two friends, and so on, and so on...
Hi Jackie.
I'm the owner and founder of milk + honey spa. I'm sorry that you were given misinformation about our gift certificate charges. We do NOT charge a "handling fee" though we do offer an upgraded packaging option on our gift certificates. Everyone has the option of buying a gift certificate without the upgraded packaging for no additional charge. I'm very grateful to one of your readers for guiding us to your website, both because I'm passionate about creating fantastic customer experiences (and I'm going to love this blog), as well as becoming aware of this hot button issue (the front desk person you referred to did not pass along that information to me or their manager, as we would have addressed this with you immediately). We are growing very quickly right now and I'm very glad to know that this is something that needs to be addressed with my new front desk crew. I'm sure you're not the only gift certificate buying customer who has been given bad information about the optional upgrade and is understandably peeved. It was actually from client feedback that we decided to offer the upgraded gift card for a small fee, rather than discontinue our original packaging. (The upgraded gift card materials cost way more than the $1.50 fee...) It looks like in this case, my devotion to my clients' feedback has backfired- it seems a bit too easy for information to be miscommunicated/misinterpreted. I was planning on refreshing our gift certificate options by the end of the year to offer just one option that still offers great experiential packaging, but without the need to charge a fee. Looks like I shouldn't wait any longer.
Thanks for the great feedback to everyone on this blog.
Alissa Bayer
owner | founder
Alissa,
Thanks much for commenting on the blog. Having options for the gift certificate makes sense, especially if your clients were asking for that. The employee I spoke with never mentioned there were options.
Looks like the lesson here for all of us is the importance of employee communications.
Thanks again for your candid response.
Good old miscommunication eh?!
Kudos to Alissa for coming on here and posting :-)
Reminds me of the time when I "earned" a $10 gift card through points at a department store. I was on my way somewhere and decided to grab a shoe polish kit, since mine didn't look as spiffy as they should. It came to $9. The store wouldn't let me use the card.
"It's to be used towards a purchase at the store."
Me: "Yes, and this is my purchase."
Them: "We don't give change, so the total cost has to be over the amount of the card."
Me: "I don't need change, you can keep the extra $1."
Them: "I'm sorry sir, we can't do that."
So much for the gift card that is made for customer appreciation...
Is that it? A one sentence line about being sorry you received bad information? Ms Bayer misses the point and a fine opportunity to redefine her customer’s experience with her business.
Brutal marketing on the spa's part. The point of the gift card is a cheap form of advertising, for them to think that they can pass on the cost of the gift card to someone who got the card is ridiculuous, they should chalk that up to verrrrrry cheap advertising getting that lead through the door, whats next, they do a tv ad and then they ask if you saw the tv ad, you get charged 500 bucks because the tv ad was expensive? gimme a break, a $50 gift card costs the spa a few bucks to make, so what, most marketing campaigns would be grateful to only have spent a few bucks per lead. That gift card recipient is probably someone who never would have come into their spa, so how can you put a price on that, the spa should be paying the person who bought the gift card commision for the new customer.
I agree with Jeffrey, it is ridiculous for the spa to charge that fee! If everyone who tried to pass on new customers to a business got charged for the introduction, think of how few businesses there would be out there. There is no way I would have gone through with the purchase. There actually should have been an incentive for the person buying the gift card, in my opinion.
if you have a problem with the way someone does business, don't blast them before granting them the opportunity to respond. if given the chance to make it right or correct an error and they STILL screw up, then it's fair game. if you're going to blast a company or service, then don't link to their site. use the scenario as an exmaple or a teachable moment, but you can do that without linking to their site.
i found this post to be disturbing and not in line with a simple principle - the golden rule. don't do this to others because no one wants to be blasted with the chance to defend themselves.
kudos to the spa owner for her response - she should have had the right to respond prior to this post being published.
I agree with Kim above. The worst thing you can do is to go ahead and pay for something you don't want or agree with. Complaining about it later does nothing. Why is it when we have our wallet out, then find out there are extra "charges", we don't just snap the wallet shut and say, "See Ya!" it's because we are presented with an inconvenience and are in the mode to buy and get out. It's good to leave the RECONSIDER option open.
One of the reasons to offer gift certificates in the first is that in reality only about 50% of those that are bought actually get redeemed (depending, of course, on the business). The rest is sort of like "free money" for the company. Any fees for "handling" would certainly be made up inside the money made from the unredeemed gift certificates. An additional $1.50 seems greedy to me, but that's just my opinion.
@Jake, Scott and Adam: If you read the post carefully, you'll notice Jackie is not whining nor blasting the business.
She is simply recounting her experience and asking if readers have had similar experiences and whether they agree or disagree with the service charge.
It's clear from the comments, though, that most people disagree with the practice.
Well, not much I could add, but it was funny to read the reactions. Just wondering if this day spa is still open for business, oh well.. or is still charging the handling fee? Someone needs to show the comments to them.
I ran into this service fee phenom over the weekend. My son and I attended an event and he strongly encouraged me to purchase the tickets online to avoid the line. The irony was that the pre-purchase ticket line ran the length of the building and the pay here now was no waiting. I literally walked to a window and bought two tickets. So those lucky pre-purchase folks got to spend $2.50 extra per ticket for the privilege of standing in line.
So...
Lessons I learned (and relearned) from this blog as a business owner:
1. People really hate the idea of handling fees - particularly for gift certificates.
2. People are more inclined to blog about or use a bad/annoying experience as an example (sorry, Jackie)
3. As a business owner, I need to regularly search on my business name to clear up misunderstanding and address service issues that I may not been made aware of.
4. Don't give out gift certificates. It seems that many commenters have preconceived notions about them; they may not be as benificial to my marketing effort as I would like.
5. Treat all my customers as potential reviewers/bloggers.
6. Even after the apology/explanation, some of the readers won't believe it or get it. In fact, the actual blog will probably be searchable forever, and people will have the opportunity to half-read the post and get misinformation about your product or service.
7. Fire the employees who have contact with customers and cannot explain store policy clearly and nicely.
I'm sure there's more. As bitter as I may sound, I really do appreciate this blog. As a business owner, this post is one of my nightmares :-)
Ok, so the front desk employee messed up, and worse, she gave a laughably bad explanation of the reason for the charge. Do I think that the gift certificate to a nice spa should be beautifully packaged without a surcharge? Yes, but I'm also kind of a design freak. But since it's basically a gift wrapping fee, it's moot. Most of us have probably paid the extra bit to have something nicely packaged for a gift. Another local business, Northwest Hills Pharmacy, wraps things beautifully for free, which means that they're always on my list of stops when I need a gift.
Little extras can make a big difference--or not. With a service business like this, it's the quality of work done and the experience of the customer that gets people in the door again and again. There's a reason this is a favorite day spa in Austin, and it has everything to do with them getting the whole rest of the package right.
@Jeffrey--I thought she responded well, and gracefully. She's sorry, she explained what happened, and she noted the steps she's taking to make sure that this isn't a problem in the future.
As the owner of a small retail store, bad move on the part of the SPA owner. While it is true that the gift cards, the packaging, and the service to use them cost money (in some cases it is more expensive than taking credit cards) so what?
You use GC as marketing, not a single person that ever used one of our GC spent just the amount on the card. You loose $3-5 bucks when issuing it, but you get a new client -- or at least someone who was not going to spend the money with you.
Totally bad move... we don't charge handling fees, values don't decay with time, they have no expiration date - and we do give change back in cash if they ask.
Remember: it is all about the experience and putting the customer first.
The $1.50 is ridculous!
Then again, what I find ridiculous is when a store employee doesn't abide by its own policies and creates a huge hassle for you. Put the handling fee aside...'returns and refunds' open a whole new ballgame of pain...
A handling fee for any gift card is insane. I would of walked out the door and looked for another day spa.
I'm the owner of the spa that Jackie referred to. A few of you seem to have read my earlier post, but it seems most did not. I'd like to make a few more comments.
1. After responding to the post a few days ago, I immediately terminated the optional small charge for the upgraded packaging. Though our non-upgraded gift cards are just attractive, clearly consumers appreciate getting the upgrade for free.
2. Yes, we are still in business. We're thriving, in fact because we are passionate about creating a fantastic experience and we've developed a loyal client following. Do you really think one small decision like that must tell you the entire story of my business?
3. Gift cards can be a small business NIGHTMARE. They are far from "free money." Most states have strict escheat laws, which require businesses to turn over unclaimed gift card funds to the state. Very scary and very real. And, worse yet, most small businesses don't know this until after they've been 'caught' and have spent the money and are left owing the state, tens or hundreds of thousands of dollars.
4. Gift cards, while a great way to get in new clients, often end up costing a business, like a spa, much more than the lifetime value of the client. Here's why: 1) a gift certificate transaction adds between 10-30 minutes of extra time to the total transaction- the buyer usually needs some help and guidance figuring out what specifically to get for the recipient, the recipient, often has never been to our spa or any spa for that matter, and because we care about ALL of our clients we take lots of time helping them to determine what service to receive, as well as explaining what will happen once they change into their robe and slippers and how to get the most out of their experience. 2) gift certificate clients rarely turn into our core client base. While it certainly happens often, and when it does I am very grateful, it is still a small percent of overall gift cert holders that convert to repeat clients compared to those that come without a gift certificate. (Converting first time clients is THE most important metric to my business.)
5. Why is it so wrong to charge for an upgraded packaging? I've been to many a department store, and when purchasing a gift, I've decided not take the free gift wrap and instead opted for the much more artfully wrapped gift for a small fee. As I mentioned, I decided to do away with the optional fee, so now all of our clients are going to get our lovely packaging. But why is it that consumers feel everything should be free?
6. I applaud consumers who take the time to participate in their experience, rather than just complain about it. As a small business owner, I am always very grateful to our clients that take the time to constructively discuss things with us that they are displeased about so we do something to address them. You'd be amazed at how many small businesses will respond quickly to constructive feedback.
Thanks again to Will for bringing this to my attention last week!
It's good to see a business owner passionate about communicating with their customers and taking feedback on board. The problem here seems to be less the $1.50 charge than the behaviour of the person on the front desk who didn't explain the options then displayed 'Teflon shoulder' tendencies. It's alarming how many service employees don't get the key principles of service which should have been installed in Kindergarten - be a nice person, be polite, explain things simply, take responsibility for what you say and do.
Even though I've already spent more than $1.50 of time commenting, here's another two cents...
Even though Jackie mentioned the fee attached to the gift certificate (the fee is now discontinued), the reason she was buying the GC was because it was her friend's FAVORITE SPA. Obviously, this was never an issue for Jackie's friend. And Jackie is a great friend to not let $1.50 stand in the way of her friend's happiness and birthday gift. Her friend obviously enjoys the greater benefits of the spa as do many people.
We all strive for perfection relating to the (actual and potential) customer's perceptions and experience. Sometimes, we fall short. Alissa is being very gracious and attentive to the comments on this post, some of which border on being rude. I only hope I can be as gracious in similar situations.
Hi, I just found your blog but wanted to say that I liked it enough to subscribe. I have to agree with you on this post as well, too many companies are sneaking in hidden charges and naming them a handling fee when there is obviously no reason it shouldn't be a disclosed fee up front or not included at all.
I'm surprised the owner knows your blog and commented it! The power of blogs!
My wife and i use gift cards all the time, the only ones that we have noticed with a service fee like that are the American express and visa gift cars, I'm not sure if stores can charge a fee of their own just for scanning it.. either way total rip off...
