Are bank switching incentives unethical?

gsmh

RG2015 said:

You may wish to correct your typo before the wags pile on in.

Bride instead of bribe? I corrected that almost immediately! Lol!

NottinghamKnight

Though if you had retained 'bride' then you wouldn't have had too many arguments to state that was unethical.

LobsterMemory

gsmh said:

No, they're not at all unethical. The incentive is a great way of gaining new customers. I remember the incentives available to students back in the 70s. The banks hope to lure new customers who will use the new account as their main day-to-day current account. It's a good marketing ploy and I have taken advantage of a few over the years.

It seems to me to be a crap marketing ploy as soon as someone else does the same, the customer is off. 
And there's nothing to make the customer stick so it's rational for them to re-switch even if the new offer is just a fiver.
Appears to be the banks just chucking money away. 

wmb194

LobsterMemory said:

gsmh said:

No, they're not at all unethical. The incentive is a great way of gaining new customers. I remember the incentives available to students back in the 70s. The banks hope to lure new customers who will use the new account as their main day-to-day current account. It's a good marketing ploy and I have taken advantage of a few over the years.

It seems to me to be a crap marketing ploy as soon as someone else does the same, the customer is off. 
And there's nothing to make the customer stick so it's rational for them to re-switch even if the new offer is just a fiver.
Appears to be the banks just chucking money away. 

It's no worse than spending money advertising on TV and elsewhere but at least with this route they can generate hard data on the take-up, whether people stay, how they use their accounts, whether they take out insurance, credit cards and so on. It's just a part of their multi-million marketing budgets. I'm happy that they put the money straight into our pockets rather than handing it to WPP, ITV and those companies.

blue.peter

LobsterMemory said:

And there's nothing to make the customer stick

Not always true. Sometimes banks will make a two-part offer: part now, part if you're still with us in (say) a year. Natwest/RBS have done this. (I fell for such an offer from RBS last year. It was £125 to switch + £50 to stay. They turned out to be so bad that I didn't wait long enough to collect the extra £50 before switching.)

As for the original question, I agree with @gsmh. "Bribe" has connotations of underhand/illegal actions. The incentives offered by banks are entirely open and above board. I sometimes wonder whether they're profitable, but that's their problem and not mine.

The_Green_Hornet

I think the banks do it just to keep the regulators off their backs.

born_again

gsmh said:

born_again said:

It's a bribe pure and simple.

In the way that a BOGOF, or buy one get one half price, or loss-leaders are bribes, I suppose so. Any offer to persuade a customer to move to another brand could be construed as a bribe but the word bribe has darker connotations so I would question its use. There is nothing wrong with an offer, a reward, cashback or anything like that. Far preferable than a communist economy where nobody can be bothered to compete or offer exceptional service. The CBA attitude of a GUM worker in Moscow was legendary. We are a capitalist economy so incentives to switch brands are perfectly normal and acceptable.

It always amuses me and fellow team members that when doing our bribery & corruption learning (every year) that we can not accept any gift from a customer, even a box of choc's for doing a good job. Yes it does happen As it is considered a bribe. Same with a 3rd party company wanting a contract with a bank offering anything to the person who makes the decision is a bribe, even taking them out for a meal.
Yet the bank can happy hand out £££ to entice customers.

Stenwold

It's hardly a bribe!

It's an incentive to get feet through the door - current accounts aren't money makers, but they (mostly) bring in the right type of customer for cross selling (mortgage, insurance, credit card etc.). 

RG2015

Just noticed that my thread has been reported as spam

Anyone care to tell me why?

RG2015

Stenwold said:

It's hardly a bribe!

It's an incentive to get feet through the door - current accounts aren't money makers, but they (mostly) bring in the right type of customer for cross selling (mortgage, insurance, credit card etc.). 

https://www.moneysavingexpert.com/news/2018/01/how-to-play-the-bank-bribe-bonanza-game-and-earn-1000/