If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
The Following is a Guest Post by brokeprofessionals.com, a personal finance/development blog about a young blogger’s journey back to “broke” after incurring six figures in student loan debt. BrokeProfessionals is a member of the Yakezie challenge and is writing about paperless billing today.
Many companies are now tauting their “green” paperless billing. When we sign up, we feel like we too are helping the environment. But perhaps some questions are in order. How much is the environment really helped by paperless billing? From a personal finance point of view, why do many companies bill for these services? For instance,
- my electric company does offer the option for online automatic billing. It would save me a stamp and save the world the usage of some paper. It would pretty much guarantee the electric company my timely payment. Unfortunately, my electric company charges an extra $5.00 per month for this “convenience.”
- my cable company practices the same policy, except it charges $6.50; and
- my federal student loans cuts my interest rate (ever so slightly) if I automate my bills and go paperless. Surprisingly, more than most of the federal government gets it (at least in this instance). However, my other student loan company, a private company, charges a 2.5% surcharge for any monies paid online. (As if the 7% interest isn’t bad enough?). It all makes you wonder…….
Why Do Companies Punish Paperless Billing Methods?
I have thought long and hard about this subject, and I cannot think of an altruistic reason why some companies reinforce such an abhorrent system. I understand that in a way I am paying for the “convenience,” but as far as I can tell my method of paying is more convenient for them as well. Thus, all that is left is financial reasons for the companies to punish clients/customers who wish to pursue “green” billing practices.
The strongest financial reason I can think of for companies to punish green billing methods is that the corporations are afraid they will lose late fees. In other words, by allowing automatic or last minute online billing, a company loses out on potential late fees (i.e. penalties), some of which border on being usurious. Moreover, most debt collectors are paid on a contingency rather than hourly basis. Additionally, any debt that ultimately is unable to be collected can still eventually be bundled and sold for pennies on the dollar. I understand companies have a responsibility to their shareholders, but think about what companies are doing….
How Else Do Companies Benefit From Paperless Billing?
The companies:
- are able to cut down on billing costs. By automating the process they are likely able to computerize their programs and cut down on invoicing;
- are more likely to recoup a higher percentage of accounts receivable;
- cut down on their mailing costs (including mailroom employees, most likely);
- get to charge an outrageous fee to their companies for this “convenience”; and
- get to promote on their website, in press releases, etc., that they are “Green” because they now offer “paperless billing.” All the while, for the aforementioned reasons, they get to laugh all the way to the bank.
Now this is likely just the cynic in me speaking, but, who is to say what the company does with the money it saves from “going paperless”? I have not heard of many corporations pledging to pass those savings along to the customers or, as would make sense (and would probably be public relations gold) to take all or a large portion of the money and support green charities and green/sustainable research and development…
What Does Paperless Billing Do For Us?
We get to save money on a stamp. Additionally, we can push back our payments later or have the payments made automatically (convenience) and we can feel like we are helping the environment. Still the fact remains, nothing is then stopping the company from thereafter taking that extra money saved (by going green) and using it for possibly sinister reasons. I can picture the boardroom now, “Great, we made an extra 40 million dollars last year from our new “green” invoicing system, now we can take that money and start up an underground oil drilling system with our petroleum arm.”
What We Can Do
Just understand that it will take more than “going paperless” to cut down on your carbon footprint and try and stay informed. if you are reading this site, then both of those things already apply to you anyway. The more companies (just like individuals) are held accountable, the better off we can all be. A sea-change has occurred in the past few years, where many companies have learned that they can save money by “going green” and many individuals have learned that taking care of the environment can actually have a positive effect on their wallets as well. Researching the practices of companies and supporting those who genuinely strive to make a positive difference is key. Just don’t take the companies’ words for it. There are even “green” mutual funds that you can invest in/support. With the amount of knowledge available today on the Internet, it is much easier to find companies who gel with your ideology and will help your budget, if such things are important to you.
Paperless Billing and Green Practices Conclusion
However, unless altruism exists (on the part of you and the companies you use)-at least to some degree, a very real danger exists that people will simply use the dollars/good will saved (from going paperless, or by customers using “cloth bags” at grocery stores, etc.), to negatively impact the surrounding environment in another manner. I think we deserve better and should demand more from the companies we use.
- Are you billed for trying to help the environment?
- Have you ever heard of an example of a company being called out for hypocritically diverting money to less than “environmentally conscious” causes?
- How do think we can do to make a positive difference and who are the watchdogs, if any?
[...] Personal Finance is seeing the opposite of me with Paperless Billing: Punished for Being Green, where they have to pay a fee NOT to get a bill? Here I get charged a fee for getting a paper [...]
I mispoke slightly, as the “convenience fee” applies more to one-time electronic payments rather than switching entirely to paperless billing (althoug some companies in the U.S. charge you a conveniece fee for that as well). Good lesson in researching more to make sure the status quo in your geographic area (or even for you personally) may not be what the majority of readers experience. That said, I still think (or rather hope) that most of the other points made are relevant and worthy of discussion, partiuclarly: what are companies doing with the money that they save from the “greener” paperless billing? Are they just saying they are “Green” in order to get good press but then using those savings to harm the environment in other ways?
-Thanks again Sustainable PF for featuring the post, sorry that one point was not as strong as I thought.
[...] This post was mentioned on Twitter by moneycrush and Sustainable PF, Sustainable PF. Sustainable PF said: Paperless Billing: Punished For Being Green? http://goo.gl/fb/QS7Dm [...]
That is so strange that you are charged for getting electronic bills. I have never heard of that. Where I live in Canada, I get charged if I don’t go paperless, which in my opinion is how it should be.
Miss T @ Prairie EcoThrifter recently posted..10 Easy Ways to Save Money
Us too Miss T.
[...] Finally, Please Read My Guest Post over at http://www.sustainablepersonalfinance.com, which is a great personal finance blog devoted to looking at personal finance through a more environmentally conscious point of view. You Can check out my article on the topic of “How “Green” is Going Paperless and Why do Some Companies Punish Their Customers for Going Paperless, Here. [...]