Netflix Restores Confidence, Bank Account

Reader Josh sent us an account of Netflix’s pro-consumer, ‘just-say-yes’ customer service that we have lauded in the past. Josh had asked to suspend his account until September 18, but Netflix unexpectedly reactivated his account on September 11, sending his bank account into overdraft. Josh called customer service to ask for an explanation and a refund. He writes:

In August I put my Netflix account on hold, my wife was starting back to school and things were *very* tight for that month. I arranged for the subscription to resume on September 18th, 3 days after payday, so that I could cover the $18.35 fee.

With the dollar$ in short supply I was carefully managing my savings account to keep it in the black. Well, imagine my surprise on September 11th when I discovered my account was overdrawn by $11.45. How could that have happened?

Oh I see …The%20Charge.pngAnd then to add to my woes, the bank had to charge me a $22 insufficient funds fee …NSF.pngSo I called up Netflix and explained the situation. “Yes” they agreed, my account was on hold, and “yes”, I should not have been charged until September 18th.

I asked for an immediate refund to my bank account of the $18.35 and the $22 overdraft charge. I stated that I did not want the balance credited to my Netflix account, and that an immediate and complete refund was the only solution that would satisfy me. They agreed to refund the $18.35 on the spot, but were hesitant to pay me for the overdraft. After a few minutes the customer service rep came back on the line, apologized for the mix-up, and agreed to cover the $22 as well. They would issue the refund within 24 hours, and depending on my bank, I should have the money within a few days. I thanked him for “doing the right thing”.

The balance was in my checking account the following day. Now this is customer service, this is how you keep customers.

Most companies refuse outright to reimburse for overdraft fees. Netflix’s pro-customer bias instead gave their CSRs the freedom they needed to keep Josh as a happy customer. Josh’s postscript serves as a powerful testament to any CEO that questions the efficacy of investing in superb customer service:

p.s. As far as their initial mistake, I understand errors will happen and I can’t expect anyone to be perfect. The fact that they so willingly owned up to it and remedied the situation before any further damage occurred made this this seem like an extraordinary customer service experience, when in fact this should be standard service for consumers across the board.

Comments

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  1. Katharine says:

    I love Netflix and I have some issues (technical) and they have always been quick to help. We switch for a bit to try Blockbuster but went back to Netflix.

  2. mrmysterious says:

    Netflix is one of the few companies out there in cyberspace that server customers better than B&M stores.

    I had an issue once of losing all 3 of my movies that I had checked out while moving and they did not make me purchase the movies.

    It’s amazing…you treat your customers like you are happy to have them and not like pieces of meat and people will actually like you.

  3. tvh2k says:

    Wow–reason enough for me to stay with netflix. BBO screwed its customers in the lastest price hike.

    One question–if money was so tight why did OP have netflix to begin with?

  4. smbfl says:

    I have been very pleased with their support as well. Tuesdays are my early day and I was in a hurry putting out the trash and putting the mail in the box to go for the day. DVD never made it back to Netflix and I know I accidentally threw it away while putting out the trash. I called their support and told them what happened and asked that they bill me for the DVD but the CSR insisted on marking it as lost and not charging me. Way to go Netflix. That kind of support keeps me a happy paying customer.

  5. GearheadGeek says:

    Never let 3rd parties directly debit from your bank accounts. Never. Ever.

    It’s great that Netflix fixed this, but you’re always at risk from their mistakes or bad acts when you give a 3rd party permission to debit from your accounts.

  6. supra606 says:

    I just got the email from Blockbuster today (the one that they seem to be sending out to everyone in random order about how they want people to pay more for less). This is a question for you Netflix users out there: How quickly do you get movies when you send them back? I hate Blockbuster as much as the next guy but when it comes down to it I am able to turn my movies over almost twice per week. I’d love to make the switch on principle but I’d like to know if I’d be going to greener pastures or if I should just swallow my pride and get less for more at Blockbuster. I’d appreciate any advice any of you have for me about Netflix.

  7. spinachdip says:

    @supra606: It depends on where you are, I guess, but in NYC, I always got my movies in 2 days (i.e., I put the viewed movie in the mail on Monday, get a notification Tuesday, and get the new movie on Wednesday).

    I’d ask around in your area – if Netflix doesn’t have a warehouse in your town, it could take longer.

  8. loueloui says:

    @supra606:

    Netflix is ‘teh bomb’ in my book. If you live anywhere near a disrtibution center, you should have no problem swapping twice in any given week if you time it right. One word of advice -look around for the one month free trial codes. Most offers are only 2 weeks which doesn’t give you much of a chance to really evaluate the service.

  9. Buran says:

    Refunding unauthorized charges and bank overdrafts resulting frm unauthorized charges isn’t “above and beyond”.

    It’s “doing what is expected of you when you process debits you weren’t authorized to process”.

  10. bigplaidcouch says:

    @TVH2K:

    “my wife was starting back to school”

    tuition + books > $18.35

    I’m not even going to guess the tuition, because it’ll vary so much depending on the school she’s going to and what kind of financial aid she’s got, but my books cost an average of $500 a semester. Even in grad school–as the number of books went down, the cost of each individual book went up.

    I can see where Netflix could fit into your normal budget and not that one month’s, especially if you use it in lieu of going out a lot.

    That said, I’d have put the account on hold earlier if I knew things were going to be cutting that close to the wire.

  11. bigplaidcouch says:

    @tvh2k: weird, the reply button only showed up after i posted my comment, but anyway it’s that one ^

  12. Karl says:

    Sounds like it’s time to switch banks to one that won’t let you over-debit your account with your debit card. If that was the case, Netflix’s debit would be rejected, and your account would still be on hold, and your bank account wouldn’t be affected.

  13. china_rider says:

    I have to say that I am also a big Netflix fan. Return times might be faster for me since they have a warehouse in Phoenix where I live, but I can typically return a movie though the mail and have the next in my queue be delivered in the next 2 days (Sunday excluded.) If I goto a mailbox that is picked up in the morning I often get next day service.

    I have had a few problems.. Mostly a few damaged disks, and one wrong disk in the envelope, and they have been very quick to fix the problem.

    We tried blockbuster service when they first started their free trial for netflix customers and it never came close to the quality of Netflix.

    My biggest complaint with blockbuster is that they often did not have the first few movies in my queue so I would get what was in the later positions and have a hard time getting what I actually wanted.

    My biggest complaint with Netfix….. Nothing. :-}

  14. smbfl says:

    @supra606
    It depends on how close you are to one of their shipping centers. We have one about an hour from me and if I ship on Tuesday the receive and send a new one on Wednesday and I get it Thursday.
    Couple of downsides to me.. #1 If I ship on Monday they rarely get it on Tuesday. Probably a post office issues but… #2 They don’t work on Saturday which sometimes cost me a day.

    You should get a trial membership and see how it works for you.

  15. calacak says:

    While it’s nice that Netflix resolved their problem, I must say that Josh should still cancel his Netflix account.

    Why? If money is so tight that he cannot cover a $20 payment to a DVD rental service and is asking them to suspend service until the next paycheck, then obviously he and his wife are living beyond their means. It’s time to get rid of all unnecessary expenses and start saving money.

  16. supra606 says:

    @SPINACHDIP, LOUELOUI, SMBFL
    Thanks for the information. I think I will give them a try.

  17. theblackdog says:

    @calacak: If the OP is like me, they’re using Netflix because it’s a hell of a lot less expensive than cable. ($67 a month for Comcast vs $17 a month for Netflix)

    Also, starting school does get expensive that first month because the schools want all of your payments at once, so we’re talking tuition, fees, and books, which can potentially run into the thousands of dollars all at once. So I doubt the OP is living beyond their means, there’s just that one month where everything hits at once.

  18. wring says:

    oh if anybody wants a 1 month netflix trial, comment me, I have one.

  19. enm4r says:

    @Buran: I agree, while they handled the request completely and right away, this isn’t really above and beyond, this should be expected.

    Are standards really so low as to consider refunding unauthorized charges above and beyond? I hope not.

  20. Mary says:

    Netflix can actually very easily be a budget saver, not a clear cut expense.

    For two years, I spent $15/month on Netflix. I bought almost no dvds, I didn’t have cable, I had dial-up internet access so no downloading (legal or otherwise). I only had that $15/month for entertainment, and it was more than enough. Granted I could have gone completely without and saved even that $15, but seriously, all work and no play? We all know where that ends.

    Since I graduated college, Netflix has been the one expense people constantly point at as one I could “easily” cut. But it’s paid for itself over and over in the amount I save by renting movies instead of buying (My new rule: I only buy a movie if I’ve seen it already and want to see it again and again. I buy very very few movies anymore, and have gotten rid of half the ones I bought before). Also, I’ve been reading lots of books and articles about “de-cluttering” your home and the cost benefits of it. So not buying movies is a savings on two levels.

    Maybe not much of a savings, but $20 a month isn’t that much of an expense.

    As for the people that say it’s not “above and beyond” I agree with the OP. Mistakes happen. I don’t expect any company to always be perfect all of the time. I expect them to fix their mistakes quickly and properly. They did that.

  21. VA_White says:

    I have Netflix and my movies get here one or two days faster than they say they will. It’s great. I can watch an entire season of a show in seven days. Not that I ever did that. :)

  22. emilayohead says:

    The fact that the OP was attempting to pay in cash instead of putting it on a credit card is the very definition of living within his means. Especially if he is also paying the tuition/books in cash and not on credit or student loans. Good for him for trying to manage his money and stay out of debt.

  23. lyndyn says:

    @SUPRA606: Re: one more perspective on the shipping times, I live in very rural southern Colorado; I never, ever expect fast postal service. The nearest Netflix warehouse is in Denver, 230 miles away. We usually have a three-day turnaround – mail movies on Monday, reciept notification on Tuesday, expected delivery date Friday, but they actually show up on Thursday. We can sometimes manage two turnarounds per week, but we usually shoot for a solid one-week turnaround, sending weekend movies back no later than Tuesday for a new batch the next weekend. YMMV, but if you’re closer in to a city with a warehouse than I am, you should be able to readily expect two turnarounds per week.

  24. jamesdenver says:

    @calacak:

    Disagree for all of Meiran’s (above) reasons. Everyone needs some sort of entertainment. I pay $15 a month for Netflix. I can easily afford movies every weekend, but prefer to watch Netflix movies instead at home. $15 for Netflix and some beer and sunchips adds up to nothing. How much do big families spend at the movies if they go?

    And I SHOULD get rid of cable, as every good show is ON Netflix. I started watching all the old CSI Vegas shows last year. No commercials and no annoying advertisments/promos DURING the show either -(something I despise)

    Netflix is GREAT for people on a limited budget. It SHOULD be promoted as amoney SAVING alternative to $50 a month cable packages.

  25. veraikon says:

    @calacak: It’s great to hear a positive customer service story for a change. But maybe the OP should count his blessings and take this as a wake-up call? I mean, if $20 can make or break you, renting movies (even at NetFlix’s great rates) is really the least of your worries…

  26. rdm24 says:

    I agree that a super-tight budget doesn’t really have room for a netflix subscription.

    I would disagree with Jamesdenver’s reasoning that netflix is a moneysaver. The best way to save money is to turn off your TV (better still–sell it), and find yourself entertained far less expensively.

    $50 a month in cable packages should never be promoted as an essential service, like your water or heating bill. It’s pure frivolity. If you can afford it and you like it, great. But nobody needs cable.

  27. d0x says:

    Blockbuster would have done the opposite and withdrawn an extra $22 for good measure.

  28. Mary says:

    @rdm24:
    You know, the alternates to entertaining yourself with Netflix are often just as expensive, or have hidden costs that aren’t taken into account.

    When we make out our budget, the money I’ve spent on books ALWAYS outweighs everything else. Usually including food. Sports? You have to buy equipment. Going on picnics? Buy the food. Going to the library? Make sure you don’t keep those books too long. Internet? Just as expensive. Going to concerts and museums? Admission prices, etc.

    Sure, there’s fun to be had for free, and I would never say entertainment is a “vital” expense. It doesn’t help you breath or sleep, it doesn’t give you clothes. But I consider entertainment to be the next tier, right below “necessity.”

    It’s only a money-saver if you’re prone to spend that type of money on other entertainment. If you’re the type who hates television and everything about it, and never goes to movies, and prefer seminars and museums, then no, it wouldn’t save you money.

    If you’re like me and you want to sit and watch movies on the weekends, then yes, it is a money saver. Very much so. Even when I was a kid I laughed at people who told me the television should be turned off and thrown out. You can watch tv, read books, write, go to museums, and be a well rounded person. I enjoy television and movies so much I want to make it my career. But I still read more than most of my friends and co-workers.

  29. spinachdip says:

    @rdm24: I agree that there’s no room for Netflix in a supertight budget, but it does work for sort-of-tight budget.

    It’s a a fixed cost, which helps with budgeting, and trying to work down your queue can discourage you from going out. I know I’ve spent a few Friday and Saturday nights in because I just preferred to stay in and finish the season of The Wire rather than go out and spend $30+ on peer pressure.

  30. aristan says:

    Seriously, Guys…

    Saying that someone should cut an expense from their budget completely because they can’t afford it during a single month that had expenses that don’t normally occur is just ludicrous.

    Especially since he actually CUT THE EXPENSE during this month. He put it on hold. He knew he could not afford NetFlix during the month of August because of tuition & books and put it on hold. Meaning… he cut his entertainment expenses from his budget. He did exactly what you suggest he do, and yet you browbeat him because NetFlix made a mistake and his accounts became overdrawn.

    I’m not in school this semester, but last semester I spent 750 bucks on required books for 4 classes. Didn’t crack half of them more than twice, though the prof always swore we would. Of course, since I was an IT major, by the time the semester ended, the newest version of the software we’d learned had come out and my books were obsolete. So I know how much textbooks can affect a budget. (and no, the library didn’t have my text books.)

    Obviously the guy who wrote in wouldn’t normally be in overdraft because of NetFlix, that’s why he uses it. The one month he can’t afford, he did something about it. So quit lecturing people on their budgets when they’re taking positive steps and it obviously wasn’t their fault.

    (I do agree however, that this shouldn’t be above and beyond. NetFlix did what they should do in this situation. Sadly, that’s become rare.)