Recently in Credit Card Fiasco Category

I return home from a trip to San Diego this week and receive a call asking about a $5 purchase made in the San Diego airport on my Visa. The agent asked if I made the purchase. I replied yes, I had. This was no problem for me so far since I understand that thieves often make small purchases to test the card before going to Best Buy and loading up. Furthermore, I hadn’t used this card much when traveling so I can see where it may have looked suspicious. I expected the agent to say something like “thanks, we were just checking” or even “we’ll remove the temporary hold we placed on your card, sorry for the inconvenience.” But those comforting words were not in the cards.

Instead, the agent informed me that she had permanently cancelled the card and was sending me a new one with a new number. I immediately thought of the work effort this was going to cause me – being without the Visa for a week, all the online places I have the Visa in my profile and the recurring charges I have hitting the Visa. But there was no turning back. I’m not sure why she bothered to ask me if it was my transaction since she had already decided my fate.

I worked on some of the early credit card fraud detection systems and understand how the process works. In this case, we have an agent who had the ability to make a radical decision, theoretically saved for the most egregious cases of obvious fraud, as in a card that was reported stolen. Instead it was done for a $5 purchase where a simple phone call could have determined no further action was necessary.

Naturally, they lost a customer in this process, but consider also that I was a good customer, charging personal expenses for years on this Visa and visiting the store the card belongs to frequently. A system could have provided more information to this decision or actually have made it much more effectively. I’m also in a critical geographical zone for this store since Wal-Mart has opened its first “upscale” store right across the street from the store I usually visit. This is a process that Wal-Mart could repeat all over the country, to this stores dismay, if it works. But if the store could keep it's best customers, with good promotions to its credit card holders, it may not work. Therefore, CRM could have played a role based on my historical transaction profile as well as a heightened propensity to churn based on my geography.

Instead, a relationship-ending decision was made without benefit of, at the least, a simple process flowchart or any utilization of the information they surely have plenty of, but don’t utilize for customer interactions. I’ve often said getting the data act together is the hard part, but even though less work is necessary to deploy the data for simple, yet crucial applications, sometimes the barrier is simply considering the full-scale customer experience with the company.