The Prepaid Debit Card

A couple of weeks before I moved, I called up AT&T and asked about transferring my DSL service. The guy on the phone told me that they were phasing out my type of DSL. If I wanted to move my service, I would have to switch to their U-Verse package. The price and speed were comparable, so I had no qualms about switching. Of course, there was a $50 fee for transferring my service, and a $100 charge for my new U-Verse-compatible DSL modem. The transfer fee was nonrefundable, but AT&T would reimburse me for the modem with a $100 prepaid debit card

“So you’re going to charge me $100 for the modem, and then send me a $100 gift card?”

“That’s correct,” said the phone agent. “You don’t have to pay for the modem since we’re upgrading your service.”

“Well, in that case, can’t you just give me the modem for free?”

“I’m sorry, but that’s not our policy.”

“Can you just give me cash back? Or a check?”

“I’m sorry, sir. We can’t give you cash, but you can take the card to an ATM and cash it out when you get it.”

Getting My Own Money Back

I needed Internet at my new apartment, so I went along for the ride. My new U-Verse modem was waiting for me when I moved in, and after a couple of calls to tech support, I got the thing up and running. About two weeks later, I got a piece of mail from AT&T Reward Center. It was far too thin to contain a gift card. Instead it contained a confirmation number and instructions to go to a website. I went online and entered the number, after which I got a message saying that my prepaid debit card would arrive in three to four weeks.

I hated having to wait another month for my own money, but I was powerless to do anything about it. All I could do was check the mailbox everyday. Finally, the card arrived, with a set of instructions and several pages of fine print. I went online and activated the card, all the while reading through the fine print. Contrary to what the phone agent said, I could not take the card down to the ATM and cash it out. I couldn’t save it; I had to spend it. And I had to spend it soon. The card would expire after just ten weeks.

Prepaid Debit Card Hassles

Prepaid debit cards are a royal pain in the ass. If you take them to a gas station, you can’t pay at the pump. Many restaurants ban them, since their may not be enough on the card for the tip. If you end up with sixty cents on your card (like I did), you have to split the payment between the prepaid card and your own cash or card. And that’s assuming you have a cashier who knows who to do such a thing without calling in the manager. And if you forget to use the card before the expiration date, you’ll see your own money disappear before your eyes. It’s not the worst thing in the world, but it’s still an all around hassle.

Why would AT&T, with whom I’ve been a loyal customer for years, put me through such a rigamarole? In the end, it all comes down to one guy with an Excel spreadsheet. Some pushy debit card salesman went to AT&T and suggested that they implement a debit card refund program. Then AT&T and Visa can get a cut of the transaction fees and unspent balances. It’s a win-win idea when you crunch the numbers. You know that’s what happened. Somebody looked at the money they could make and greenlighted the program.

Never mind that such a program does nothing but put AT&T’s customers through a needless pain in the ass. It’s a short-sided idea, and if I were an AT&T shareholder, I would oppose such a maneuver. Sure you’ll make more money in the short term, but screwing over your existing customers is never a good strategy for long term growth.