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July 6, 2004 12:01 AM

Broken: California DMV online

renewPaul Schreiber writes:

It costs $4 *extra* to renew my license plate online. It should be cheaper, since they're not paying someone to open the envelope, process the check, amortize the risk of bad checks, etc.


Do they allow payments by credit card through the mail-in form? If not, they're likely trying to recoup the credit card processing fee through this fee. Credit card companies prohibit this, you might want to let them know if this is the case.

Posted by: name at July 6, 2004 12:23 AM

According to Bay Area commute columnist Gary Richards, CA DMV has come to their senses and will eliminate this fee.

I'm curious, though: Richards says the fee is prohibited by law. I don't think that's true. I think it's just part of the agreement between the merchant and the bank providing the merchant account. But I don't actually know.

Posted by: Steve Williams at July 6, 2004 11:04 AM

The last time I bought tickets online through Ticketmaster, I had two options: (1) They could email me barcoded ticket images, which I could print out; or (2) They could print the tickets up for me on their materials, put them in one of their envelopes, and mail them to me at their expense. Guess which option they wanted to charge a $2.75 "convenience fee" for? Yes, the *email* option was *more* expensive.

I guess Ticketmaster and the California DMV figure that people are so in love with the internet that they won't mind paying extra to use it.

Posted by: E.T. at July 6, 2004 11:05 AM

This is when Marketing gets involved. I remember a national bank here in Canada used to charge a subscription fee for doing banking via ATM, online or by phone. Because we all would pay extra for self-serve rather than interacting with a live person...not.

The boon of no-fee Internet banks made them wisen up.

Posted by: quanta at July 6, 2004 11:39 AM

Let me get this straight -- companies are introducing convenience features that consumers want, and then they're charging more for them? Crazy!

You may be surprised to learn that these organizations, government or otherwise, are not just there to recover their own costs.

Posted by: mendel at July 6, 2004 12:25 PM

Point taken, mendel, but it really is crazy, or at least bad marketing, if the organizations are discouraging customers from choosing options that increase the organization's profitability.

Going back to my Ticketmaster example, if I had chosen the email option, I figure it would have saved Ticketmaster at least of couple of dollars (material, postage, and even labour as the envelope with my tickets appeared to have been manually stuffed). But by trying to charge me a fee for that option, they got less money out of me and spent more themselves.

Now, perhaps I'm wrong -- maybe there are enough people out there willing to pay more to do the work themselves, or who wait until the last minute to buy the tickets so they have to be emailed, or who just don't notice the extra fee, that Ticketmaster ends up making money this way. But it still seems backwards to me.

Posted by: E.T. at July 6, 2004 12:44 PM

How about this as an example. The US postal service allows you to submit a change of address by mail for free. If you do it online it costs YOU a $1 convenience fee.


Posted by: nameless at July 6, 2004 06:57 PM

I guess the keyword here is "Premium Service".

As long as these services are considered special, extra, niche, or new, the customer should be prepared to pay for the risk/startup costs the service organization has taken to provide the service.

As soon as a critical mass is using the service and/or the costs have been repaid, competition laws take effect and the market mechanism will drive the price of the new service down (and possibly the price of the old-and-now-niche service up).

Posted by: Peter Boersma at July 7, 2004 03:16 AM

They are recovering initial costs planning, developing and deploying these self-serve online systems. It probably also ends up costing them more to maintain the systems (or pay for the service if outsourced) than it would cost to pay a clerk to process mail in forms.

Posted by: reed at July 7, 2004 12:44 PM

This one pissed me off when I first noticed the convenience fee a few years ago. Of course I renewed by snail mail all of my vehicles.

Late last year I was really pissed off by the CA DMV bouncing back to me a vehicle transfer form (transferring it from my wife to me). She had made a mistake in the last two letters "et" in "street" and "CA" in "CA". I had used white-out to go over the letters and redo them, which the DMV didn't like.

They sent the title back and made me fill out form "reg 101", a "Statement of Error or Erasure" before they'd take it again. Under "REASON FOR ERROR ERASURE" I put, "Pen ink doesn't erase."

Talk about a waste of money and time!

Posted by: Scott Packard at July 13, 2004 06:40 PM

It's all about the money!!! That's all there is to it!! Show me the money!!!!

Posted by: Jason at July 16, 2004 01:42 AM

maybe the online fee is paying wages for a computer jockie somewhere here in the U.S. and not overseas. maybe even a CA resident!

Posted by: DAB at August 3, 2004 05:45 PM

this is great marketing!!

they know it is worth $4 of your time

to not go to dmv and wait in the line for several hours

Posted by: speedball at August 14, 2004 11:04 AM

Louisiana does the same thing. Amazingly (actually not, considering Louisiana politics), it cites a *law*. I didn't read the legalese to see if the law mandates charging a convenience fee for paying for things online.§ion=316.1

Posted by: Jay Bienvenu at September 22, 2004 05:54 PM

Similar broken process in Ontario, canada. You pay more to use a self-service kiosk than if you went to a Motor Vehicle office, stand in line and have their clerks process the renewal.

p.s. It is worth more not to stand in line for a half hour.

Posted by: Ron Norwood at March 6, 2005 02:20 PM

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