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H&R Block, Inc. Message Board

  • enlightened_thoughtful_investor enlightened_thoughtful_investor Jan 19, 2011 9:19 AM Flag

    Bait and Switch

    "The free returns aren't a charity project, even if many of H&R Block's early filers tend to be poorer people who want their tax refunds as soon as possible. "It's not about giving away business for free," says Amy McAnarney, "H&R Block's senior vice-president for tax operations. One goal is to increase foot traffic at H&R Block offices. " 'Free' can be a very powerful word," she says. Until they arrive for their appointment, many of these new customers might not realize they actually need more complex tax forms -- and thus will wind up paying for them."

    Sounds pretty much like a bait-and-switch scheme to me.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • "Ans so, what's in it for you? You're running a charity, right? That's an expensive seed to plant just hoping they come back and pay you in a year."

      You'll have to excuse me if I'm reluctant to share the details of this strategy, which is a competitive advantage of my business. Just continue thinking it is irrational, dumb, foolish, or what ever you like. There are very sound business reasons for everything, but sharing them publicly isn't for me to do.

    • Perhaps you should offer free returns to anyone on unemployment or in foreclosure
      _______________________________________
      I can understand free to the unemployed, but I'd skip those in foreclosure. Most of these folks are flush with money, having lived in the home for months without paying the mortgage. NOT all houses were lost due to low income; many were lost due to being “underwater”. Many of these homes had a 2nd equity loan that was used to buy cars, and vacations. They hocked the house to the limit, and found a way out.

      My state has a refundable $25 credit for low income people who aren’t required to file. Also a property tax credit for low income people who own their homes and pay real estate tax which can net them hundreds of dollars. I had begged Block to do these returns for free and was told NO.
      Now, I can do them for free.

      Last week I talked to an elderly gentleman who said Block told him he wasn’t required to file. He lived on SS, was over 65, and took a part time job earning 9 grand.
      I told him Block was correct, he wasn’t required to file, but he would lose $400 if he didn’t. Those returns I will do for free.

      I’m just hoping IRS will get the word out to all those low earners, who don’t need to file, should file to get the Make Work Pay credit.

      A free return to dependents makes sense. Stops the kid from filing on line and claiming himself.

      There are many times a free return is GOOD marketing.

    • As a matter of fact, the first return I did this year was for a young man who spent most of last year in Afghanistan, and I did not charge him a penny. Glad to do it. Many Liberty franchisees provide free returns to those who are unemployed, etc. Sorry you think our teachers are such parasites who are bankrupting our cities. A cop in my town starts out at $33,000 a year and one was killed just a couple of months ago after just a short time on the job not too far from where I live. What do you think they should be paid?

      Look, you can criticize all you like as far as my choice of public servants I choose to offer my services to without charge. My point is that I do it gladly, without the hope that I can somehow charge them. You have completely missed my point with your obfuscation, but it doesn't matter. In the end, the free marketplace chooses winners and losers, not you or me.

    • Floridatax,
      Your plan to offer these services to the vital members of our community is certainly commendable. Where would be without them? And of course this is your choice. Do you also include active military.?
      However you are offering this free service to the segment of the community that needs it the least. I do these tax returns and they are some of the best paid people in the community. Plus the option to work overtime and get those great pensions that are bankrupting the cities. Perhaps you should offer free returns to anyone on unemployment or in foreclosure now that would be a worthwhile service.

    • Ans so, what's in it for you? You're running a charity, right? That's an expensive seed to plant just hoping they come back and pay you in a year.

    • "I'm sure that Liberty never expected a penny's return from any source for all those free returns it has done (and is doing)."

      Let me try to explain the differene, if anyone cares. When I promote free returns for teachers, firemen, police officers, nurses, etc. it is my hope that as many of those people as possible will take advantage of my offer. It doesn't matter if they are filing a 1040EZ or 2 Schedules C and five Schedule E rental properties. I will cheerfully do the returns for free without any desire for the customer to end up having to pay. This is very differnt from Block's strategy, which is to drive people into the office based on an expectation that will, in may cases, not be realized. Do you see the difference?

    • "They have admitted that their goal is not to do 'charity work' ..." (iliketurkishprisoners)
      ---

      Oh, wow. An American corporation that doesn't consider its primary mission to be charity work. How unusual.
      I'm sure that Liberty never expected a penny's return from any source for all those free returns it has done (and is doing).

      Block's problem with the free 1040EZ program is not with the concept, but with its execution.

    • > It's not the ads, it is the statement from Block's VP spokesperson that expresses Block's intentions. They have admitted that their goal is not to do "charity work" but to get people in with the expectation of a free return and then find that they don't qualify and charge them. Her own words describe exactly how the company views this as a business decision. Very very telling. <

      So you find it "telling" that HRB management is trying to do things to get more customers and make more money? That seems to be something that many posters here criticize it for NOT doing or not doing well. How would you, as a stockholder, feel if HRB announced tomorrow that half of all 2011 profits were going to be donated to Haitian earthquake related charities?

      Not even people who don't even know how to file their own tax return for free are so ignorant as to not be aware that a company who advertises something for free probably is going to try to sell them something if they try to take advantage of a free offer, and if they are that ignorant, they will get a free lesson on how the world actually works, so they either get the free return or an even more valuable free education!

    • It's not the ads, it is the statement from Block's VP spokesperson that expresses Block's intentions. They have admitted that their goal is not to do "charity work" but to get people in with the expectation of a free return and then find that they don't qualify and charge them. Her own words describe exactly how the company views this as a business decision. Very very telling.

    • She's (am) a twit, and most likely doesn't comprehend what she said. This woman is symptomatic of what is wrong with block. With am in a leadership role, the value of this company has been nearly halved...

      $8 by May - there's still a short opportunity.

      • 1 Reply to blockheadsrus
      • ".. most likely doesn't comprehend what she said." (blockrus)
        ---

        I don't know the lady or anything about her, but it also sounds to me like she didn't put much thought into what she said.
        Basically, management's handling of this tax season so far has been disappointing, imho.

        Block management continues to focus on stock price rather than the business. (I am not suggesting that stock price can or should be ignored. But to focus almost entirely on the stock price without considering the fundamentals of actually running the business has not worked.)
        For example, in the free EZ program, they could have used a "keep it simple" design. Instead, they were terrifited of missing out on potential fees for EITC.
        Another example is calling a RAC "fast." More consideration should have been given to the long term effect on the business.

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