February 22, 2006

Keep The Change: Is America that Stupid?

I first heard one of Bank of America's promotions for their new "Keep the Change" campaign while on a business trip last Spring in Arizona. The idea sounded preposterous - the bank would help you save money by taking the difference between your debits and the nearest whole dollar and depositing it into your savings account - theoretically helping you create a nest egg for the future. Somehow, they expect that we have no financial planning abilities, and that the nickels and dimes they transfer from one account to another will make us all rich some day, something we couldn't have achieved on our own, through stocks and bonds, real estate, or common sense.

Now, the commercials are getting more air time. This evening, during Winter Olympics coverage on NBC, an ad featured a young boy doing the math in his head while his mother paid for groceries. He gleefully spouted off 87 cents if she had been charged $4.13. Oh, what a bright young man, and how lucky we are for Bank of America to come to his family's aid and prepare for his inevitably illustrious college career! Ridiculous. If his parents have to rely on Bank of America to guard their piggy bank, it's not likely that little Johnny is going to make it to a community college, let alone a reputable four-year university.

The "Keep the Change" campaign effectively gives Bank of America the right to overcharge you not just on a small number of your purchases, but EVERY purchase. It guarantees that you will always pay more than the cost of goods. It gives Bank of America the right to take even more money from their clients and invest it as they choose to make even more money for the bank. And what is the likelihood that this campaign will even be around when it's Johnny's turn to brave the SATs? Marketing programs come and go, and with silly exceptions like Free Checking, most don't have much staying power. And what if Bank of America merges or gets swallowed up in some future unforeseen acquisition. Will the program continue?

Bank of America has always annoyed me. They're the IBM or GM of banking. Huge, but not offering anything positively differentiated from the competition. I've used Wells Fargo for the better part of a decade, and I can't remember the last time I stepped into their branches. My online banking does everything, and it doesn't ask me if I want to "keep the change" or get fries with that.