Business errors and overcharging cost you money, increase company profits

Consumer

Carol Forsloff----More than a decade ago the television show 60 Minutes had a segment about errors that occur on transactions involving bill payments, buying groceries or purchasing goods of any kind.  And what they reported was one-third of these transactions involved errors, not in the customer's favor.  Ten years later, anecdotal and research evidence suggests those errors may have not diminished, but actually  increased; and the impact of that over millions of purchases can increase business profits while creating customer harm.

Over the past year a journalist has examined personal records, observing grocery receipts, utility bills, and other consumer activities.  On many, if not most, of these bills and transactions, there have been errors, not in the customer's favor.  These can be medical bill overcharges or utility bills.   The FTC has reported 1 in 5 Americans have errors on credit reports.   And the problems are not just American ones, as the Guardian reported how 28% of customers of energy companies had been overcharged on their energy bills.

Some of these errors have been small.  A fifteen cents error on a Chase account, overpricing of seven cents on a grocery item, and a $50 extra charge on a Comcast account relative to a house call made about constant dropped calls and service problems.

A more recent example shows how widespread these problems may be.  An order for a Casio keyboard from Amazon was delivered promptly, however one item that belonged with the kit, a software utility, was missing.  A chat with the service representative brought the response that an entirely new delivery would be made as a replacement, and that 30 days would be allowed to return the original item.  Reassurance from the representative emphasized the fact that the customer could call and schedule the pickup of the item, at no cost for the return.  In addition, the customer was promised a transcript of the chat conversation and complete instructions for the original item's return.

The following day the doorbell rang.  Less than a minute later, the customer opened the door; and no one was there.  Later it was learned the UPS driver had arrived to pick up the original package, despite assurances that the customer could call and make the arrangements.  The driver had not waited for a response to the doorbell, as the only sign of anyone having been there was a glimpse of the UPS truck pulling away.  A complaint to UPS brought the explanation that the information would be passed along to the driver and a return call would be made to the journalist customer for an estimate for pickup at a later time.

The UPS office failed to call.  The copy of the chat conversation was not sent.  Nor were there instructions for returning the original item.  Another call to Amazon resulted in obtaining those instructions but still not the copy of the chat conversation.  Instead an email arrived from Amazon that stated the original item was on its way back, despite the fact the driver never picked up the package.  What's more, UPS offices maintained they were to pick up two packages, not one.  A third call to Amazon brought a customer service representative who maintained he would follow up with the account, apologizing for the numerous errors already made.

The issue remains unresolved and simply attests to the ongoing problems that occur all over America.  And if time is money, those errors cost the company if the customer discovers them.  On the other hand, the number of errors is likely much larger than the number of customers who discover them, resulting in profit for the company.  The unwitting customer becomes the loser and multiplied many times over, the company wins again.

Vigilance is key to change, as each person must examine the results of every transaction in order for the problems to end while business groups need to encourage companies to emphasize care and caution when they work with customer needs.  But it is unlikely with the number of errors made by businesses of all kinds that the problems will end, as the numbers of transactions have increased with Internet purchase options, and the time it takes to check every receipt and transaction makes it difficult for the consumer to track the mistakes.

Alternatives: the Cooperative Business

On one hand, people are out of work and help to find a job is scarce. On the other, people have needs that only a sustainable income can meet. These two facts lead many to attempt to set up their own businesses; however, frequently, these businesses do not survive, or fail to bring in enough money to meet the family's needs.

One of the reasons many home based and single person enterprises do not get off the ground or thrive is that the owner-operator does not have all the skills needed to make a business successful. If people can accept the fact that the whole is greater than the sum of the parts, they have taken an important step in being able to work together to create a viable enterprise.

The cooperative business model is ideal for those who want to pool their skills, knowledge base, and abilities to from a solid foundation for a business. The cooperative model does not guarantee success; a sound business plan with a marketing study is important so that the company knows what business it is in, with whom the competition is, and perhaps, most importantly, if there is an existing demand for their product or service.

A cooperative is not a business but a business model. Cooperatives are democratic as all members of a co-op are equal decision-makers in the enterprise and employ the one-member, one vote, process of making decisions. Each worker owns a share in the cooperative and the enterprise is owned and controlled by the workers.

How to Get Started:

The first step is to talk with family and friends; however, be focused and careful. Someone may be your best buddy but may turn out to be a lousy business partner. The same goes for family; your brothers or sisters are not necessarily ideal business partners; so proceed with caution.

Seek out people who are in a similar situation as yourself, need an income but are not desperate. You will not get rich overnight and the pre-planning phase is important to the venture's long-term success; so if you need money now, your own business is rarely the answer, cooperative or not.

Once you have your cooperators, how many you need may vary from state to state and province to province. Here in New Brunswick, you need three (3) people to form a cooperative; it is time to detail the business, what you sell, make or offer, to whom and at what price. This information forms the core of your business plan
There may be organizations that can lend you a hand, provide insight and information, once you have reached this stage. Do your homework and find out what assistance is available locally and within your region. Remember we are all in this together and together we can build a strong regional economy.

SPIN Farming: Growing Urban Farmers

[caption id="attachment_14887" align="alignleft" width="300"] Courtesy SPIN Farming[/caption]

Bob Ewing - What people really want is a job- a steady income that enables them to pay for food, school and medicine, for example.

The way out of the social and economic mess we are in is to create those jobs, cooperatively and individually, thereby allowing people to work and earn enough money to take part in the market place, and purchase the goods and services they need.

There are a number of ways that this can be done. Urban agriculture is often presented as one of the ways people can generate income. Urban agriculture involves growing food and raising livestock within municipal limits, while the movement is growing it is still controversial. The keeping of livestock, chickens, goats and pigs, often encounters stiff opposition

I will look at livestock in a separate article, and for now focus on herbs, vegetables and salad greens when using the term urban agriculture.

Despite the controversy, there are people and organizations who are working to make urban agriculture a viable business opportunity. Roxanne Christensen is one of those people.

I first talked with Roxanne Christensen for an article that was published in Digital Journal in November 2009. The article focused on a new, at the time, urban farming technique known as spin farming.

Roxanne Christensen co-founded Somerton Tanks Farm, a half-acre demonstration urban farm that served as the U.S. test bed for the SPIN-Farming method from 2003 to 2006.

SPIN stands for S-mall P-lot IN-tensive, and it makes it possible to earn significant income from land bases under an acre in size by growing common vegetables.

The method sounds perfect for anyone who lives in an urban environment, and wants to make a living growing herbs and vegetables, for example. However, there is much more to running a farm that growing the vegetables, Even if you are an excellent gardener and grow great tomatoes you may not understand the market place, pricing, promotion and how to sell to restaurants.

In her article, The Professionalization of Urban Agriculture, Christensen states what she feels makes Spin Farming a viable business model for the urban farmer.

“While most other farming systems focus primarily if not exclusively on agricultural practices, SPIN emphasizes the business aspects and provides a financial and management framework for having the business drive the agriculture, rather than the other way around.”

People need to eat and most of us appreciate food that is fresh and the closer to home the food is grown the fresher it is likely to be. Urban agriculture moves the farm into your neighbourhood and SPIN farming provides the farmer with the tools needed for success.

People want work. Urban agriculture can create those jobs. If it is embraced by municipalities who can then develop the bylaws that assist, rather than hinder, the growth of urban farms, and if the future urban farmers get the business training they need to succeed.

If this happens, then economic revival at the local level will begin to happen and spread from community to community across the country.

Workers Cooperatives Can Create Jobs

[caption id="attachment_13967" align="alignleft" width="300"] Sitting in the cold[/caption]

Bob Ewing - Yesterday, as I left the dentist’s office I saw a man sitting on a bench in the mall about 30 feet away. I recognized him as someone I had seen in various spots around the City. There was a quiet air about him that suggested he was trying not to be noticed.

The weather here was brutal yesterday, minus 28 Celsius, and being outside for more than a few minutes, even properly dressed, was not a lot of fun, so, perhaps he was seeking temporary shelter.

My purpose is not to label this individual, but to use the experience to underscore how serious the rate of unemployment is here, and elsewhere.

People need jobs to buy stuff and housing is one of the most expensive items we purchase.

How can we as a society transition from a place where hunger and homelessness are growing, to a place were people can enter the marketplace and buy what they need? Worker’s cooperatives are one way that this transition can be carried out.

A cooperative is not a business unto itself but a business model; a business model that sells goods or services just as any other business does, the difference rests in the worker cooperatives’ structure.

Workers cooperatives are democratic, as all members of a co-op are equal decision makers in the enterprise, and employ the one-member, one vote, process of making decisions. Each worker owns a share in the cooperative and the enterprise is owned and controlled by the workers.

How can this make a difference in the unemployment rate? People have skill sets; some are capable of designing and making items, chairs, jewelry and so on. Others have great math skills and can do book keeping, still others can plan an ad campaign or handle public relations. Separately they are not able to run a successful business; but working together or cooperatively they have what it takes.

Some people do not attempt to set up their own business because they know they lack all the skills needed, and cannot afford to hire; others venture forth, some succeed, others do not.
When the circle is expanded and others are involved, then the picture changes; the potential resource base widens and the result is a stronger corporate foundation.

There are agencies that can assist in the development of your cooperative enterprise. Here in New Brunswick, you only need three people to get started and there is a provincial council that is very knowledgeable and helpful.

A word of caution, be careful about who you ask to men a member; just because someone is a family member or a long time friend does not mean they have the skills the enterprise demands or that you can work together, especially when times are going bad, which can happen in any business.

The United Nations has declared 2012 to be The Year of the Cooperative, take a hint and take a look.