Are bank switching incentives unethical?

Stenwold

RG2015 said:

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/

You already posted that link, not sure what your point is or whether I'm missing something?

RG2015

Stenwold said:

RG2015 said:

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/

You already posted that link, not sure what your point is or whether I'm missing something?

Sorry, forgot I had posted it.

My point is that you say it is hardly a bribe and MSE call it a bribe.

born_again

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.). 

Bribe.
a sum of money or other inducement offered or given to bribe someone.

So would you move your bank account if they did not offer one?

gsmh

born_again said:

a sum of money or other inducement offered or given to bribe someone.
So would you move your bank account if they did not offer one?

Yes, absolutely! The 'bribe' is a nice extra, but it's the account I'm interested when I switch accounts - I have often switched to banks which offer no reward.

Ken68

The "bribe" is a legitimate advertising expense and therefore deductible against corporation tax.

Stenwold

born_again said:

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.). 

Bribe.
a sum of money or other inducement offered or given to bribe someone.

So would you move your bank account if they did not offer one?

No, that's the point of the incentive.

Also, you can't use the word bribe in the definition of the word bribe - it offers no explanation to what the word means!

A quick google search for the definition will show you that most examples are linked to illegal/dishonest connotations, which is not what these incentives are. Would you rather there were no rewards for switching account?  

RG2015

Stenwold said:

born_again said:

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.). 

Bribe.
a sum of money or other inducement offered or given to bribe someone.

So would you move your bank account if they did not offer one?

No, that's the point of the incentive.

Also, you can't use the word bribe in the definition of the word bribe - it offers no explanation to what the word means!

A quick google search for the definition will show you that most examples are linked to illegal/dishonest connotations, which is not what these incentives are. Would you rather there were no rewards for switching account?  

Yes, I would prefer if there were no rewards for switching banks. I cannot think of any other product or service for which you are paid for acquiring.

Usually, I will choose a product or service by looking at its quality, efficiency, utility, price, value for money, reliability, after sales service etc.

Banks are in a unique position of not only providing a current account banking service free of charge but actually paying you for your custom.

Paying an incentive is neither unethical nor illegal or dishonest (usual connotation of a bribe). It does though demonstrate a paucity of ideas or demonstratable benefits for promoting their product.

eskbanker

RG2015 said:
I cannot think of any other product or service for which you are paid for acquiring.

For now at least, there are numerous insurance and utility companies offering preferential deals to new customers only, and there are all the cashback sites that effectively deliver the same.  Sky TV is another that springs to mind - these might not all literally put a wad of cash in your hand but the principle is the same....

RG2015

eskbanker said:

RG2015 said:
I cannot think of any other product or service for which you are paid for acquiring.

For now at least, there are numerous insurance and utility companies offering preferential deals to new customers only, and there are all the cashback sites that effectively deliver the same.  Sky TV is another that springs to mind - these might not all literally put a wad of cash in your hand but the principle is the same....

The principle may be the same but the difference here is the wad of cash. None of these other deals pay you money without you having to pay them anything.

And at the risk of labouring the point. You can go on and on claiming switching fees without incurring any expense.

In my mind, this does distinguish bank switching cash incentives from any other incentive.

eskbanker

RG2015 said:

eskbanker said:

RG2015 said:
I cannot think of any other product or service for which you are paid for acquiring.

For now at least, there are numerous insurance and utility companies offering preferential deals to new customers only, and there are all the cashback sites that effectively deliver the same.  Sky TV is another that springs to mind - these might not all literally put a wad of cash in your hand but the principle is the same....

The principle may be the same but the difference here is the wad of cash. None of these other deals pay you money without you having to pay them anything.

And at the risk of labouring the point. You can go on and on claiming switching fees without incurring any expense.

In my mind, this does distinguish bank switching cash incentives from any other incentive.

Up to you whether or not you consider such differences material or not in the context of ethics, but to me that raises another distinction that seems valid to me, namely that of corporate versus personal ethics.

From a bank's perspective, is it unethical to offer incentives?  IMHO, absolutely not - it's just a marketing expense, structured slightly differently from paying higher interest or whatever, and the motivation for the banks is clearly to attract customers who'll stick around and generate profit from cross-selling, etc.  Obviously there's a limit to how tightly they can structure such offers to achieve those ends but recent trends towards delayed bonus payments (e.g. after a year) and high volumes of debit card payments rather than one-off switches of DDs are indicative of the desired effect, despite them being insufficient to deter the hardcore.

From a customer's perspective, is it unethical to accept incentives?  This one has been done to death before on other threads, with one arguably valid distinction being 'genuine' switchers versus those happy to game the system, and to me it's this latter point that's the one where ethics can legitimately be viewed as relevant....