Should Companies Pay Us for Waiting?

My Dutch friend walked into his bank for a short transaction and was kept waiting for 45 minutes. Infuriated, he told the manager that his time was too valuable for this.  Ten days later a credit of €25 appeared on his account!  

Why can’t service organizations that keep you waiting an overly long time all do this?  Admittedly the proper price is not easy — Bill Gates’s time is more valuable than mine. But companies that offer a credit on your account if you have to wait more than some posted time would have a competitive advantage in attracting clients; and the threat of payment would provide lower-level managers an incentive to improve efficiency.  The only example I know of this practice is our plumber, who advertises that if he is more than 30 minutes late, the cost of labor is waived. (HT to GAP)

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  1. Daniel says:

    I can’t even get Verizon or Comcast to pay for outage time, let alone the time it takes me to wait on hold for them to tell me that they believe it’s my fault for 45 minutes before they push a button and fix it. Makes me think of the SNL sketches of Lily Tomlin as the phone company rep. Not much has changed.

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    • Felix says:

      Laugh In, not SNL. Criminy, I’m too old for a 20 year mistake like that :-)

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      • Daniel says:

        SNL S2E1 was the skit I’m referring to but that was a spin off of the Laugh In regular skit right? I’m too young to know if that’s a mistake.

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  2. Dave says:

    Didn’t Pizza Hut used to offer your pizza free if it wasn’t delivered in some fixed time (I believe it was 30 minutes)?

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    • It was says:

      It was Domino’s Pizza that did that, and they had to stop due to the amount of accidents their drivers were causing.

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  3. Carolyn says:

    Comcast will credit your account $20 if they arrive late for an appointment. They generally give you a 2-3 hour window, though.

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    • uppreleftcorner says:

      It’s a 4 hour window, commercial or residential account. They inevitably show up in the last hour, if at all. So your $20 works out to about $5/hour for your time (subtract that, I guess, from time lost from work if appropriate).

      Wasn’t there an attorney in Maryland a few years ago who successfully sued Comcast for his lost time waiting around for them to show up?

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  4. Daniel says:

    While not directly paying for time, I have seen a lot of promotions where if a task is not completed within a set time limit, it’s free. Pizza chains and dry-cleaning places are the things that come to mind for me, though I imagine that differs between countries.

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  5. Dave Nelson says:

    On a recent shopping trip to my local Target store, there were only a few registers open and each of them had relatively long lines. I didn’t see the lines as exceptionally long, though, and I waited patiently in the line that I’d chosen.

    When it was my turn, the cashier handed me a coupon for $3 off, “because [I] had to wait so long.” She said I could use it now or on a future visit. I admit the wait was longer than I would have liked, but I’ve waited in MUCH longer lines at grocery stores before, and have never been compensated for it.

    The compensation put a smile on my face, if nothing else, and showed me that the store is making an effort to make wait times reasonable.

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  6. Donnie says:

    How to avoid the Cobra effect? Suppose people start purposely standing in line to collect the payment.

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    • Mike says:

      Thus making wait times even longer.

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      • Donnie says:

        It seems the obvious solution if you wanted to reduce wait times would be to charge the customer based on the amount of time spent waiting. This would discourage overuse of teller’s scarce time.

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    • Michael says:

      By keeping the payment low enough… Would YOU wait in line for $5 an hour? Especially in a situation where if you did it often enough the store could bar you?

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    • David says:

      Then you’d see what some busy grocery stores do and have everyone queue up in one line and have a staff member direct customers to the next available register.

      It actually works quite well since there isn’t jockeying for a register with a short line, and everyone has the expectation of a bit of a wait.

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  7. Seminymous Coward says:

    Domino’s used to have a 30-minute delivery guarantee until some automobile accident lawsuits targeted them via it. It’s likely other pizza places have or had them.

    I have also previously received a credit from my cable internet provider for a completely missed arrival window.

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  8. Jaime says:

    If that is the only example you know of you have too healthy a diet and/or are depriving your kids of a glorious treat :), seeing how most PIZZA deliveries have similar schemes, and have had, for over a decade now in some places.
    As far as I know they were the first market to apply this kind of scheme.

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  9. Nylund says:

    “The only example I know of this practice is our plumber”

    What about pizza delivery services that promise 30 minutes or less or your pizza is free?

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  10. Marcia says:

    No thanks. Rushed service would most likely be worse than it is now. If I have to wait I just want the service I receive to be as thorough as the person before me got.

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  11. Joe says:

    I could see a result of this idea paralleling the result of the Isreali day care tale in the Freakonomics book. Companies realize it’s cheaper for them to pay you to wait than figuring out how to decrease wait time.

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  12. Joe Konstan says:

    An excellent idea (and one that lots of service businesses are embracing, including credits for late Cable TV installers). But I don’t think this is a one-size fits all problem. For some situations, the best alternative is to let the market moderate between higher cost/low wait and the alternative (consider a doctor’s office where your co-pay is lower if you’re willing to be bumped when the doctor is running behind), or even a direct compensation to clear waiting lists (much as airline passengers choose to volunteer to be bumped for compensation.

    For other situations, a better alternative may be more information and productive ways of using the waiting time. I’ve never had a serious wait at the bank, but I’ve appreciated when other service providers called me to let me know that the doctor/barber/etc., was running behind. Then I could keep working. Or the bank/office/whatever could provide a set of computers for waiting customers to use, helping them make the time productive. One of the better examples is mall restaurants — often there is a wait, but the restaurant can provide pagers so the customer can wander the mall and handle other errands while waiting.

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  13. Joe says:

    I could see a result of this idea paralleling the result of the day care story in the Freakonomics book. Companies realize it’s cheaper for them to pay you to wait than figuring out how to decrease wait time.

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  14. Emily says:

    Chick-fil-A (I know, I know), at least at some franchises, will give customers what is called a “Be Our Guest” coupon for a free meal if their wait is over 5 minutes.

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  15. Doug says:

    Hidden due to low comment rating. Click here to see.

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    • Daniel says:

      I don’t think you’ve read up on competition or effective monopolies. Many service providers hold effective monopolies and the wait times are well studied by the providers who don’t care if we are upset as long as we don’t leave. For proper competition to happen you need between 7 and 10 options, not 2. If these 2 real options just decide to both have long wait times, there is no recourse. If you are a Verizon cell phone customer and you get angry and move to AT&T and they make you angry, you can move to . . . not another company with similar service and options. People are already paid for their wait times, but not in $, but in the opportunity to have better services. We are not really free to shop in a market of 2 or 3 options.

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  16. Enter your name... says:

    I don’t usually mind waiting when I know that’s what I’ll be doing. But when the doctor’s office staff lies about the wait, that’s especially irritating. I once showed up 15 minutes early as requested, and was told (I asked) he was on time. Then it would “only be ten minutes”… for 40 more minutes.

    It only seems to be the one office. Since then, when I’m in that office, I don’t accept any answer to questions about his schedule unless the receptionist gets out of her chair, finds the doctor’s assistant, and asks her just for me. About half the time, the receptionist sheepishly comes back with a noticeably different answer.

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  17. Student says:

    I am currently a team leader at a quick service restaurant, and our operator has a way to compensate someone for their time on waiting for their food. Our ultimate goal is to get you your food in 2 and a half minutes, but as long as it is under five, we feel that you aren’t waiting too long. Once it is over 5 minuetes, we like to give a customer a coupon card for a free iteam. If anything is over 9 minutes, we refund you your food and give coupons on all the items you were waiting for. The idea of this is if a customer has a bad expirence and we turn it around and astonish them with what we do for them, that they will be more loyal customers. If more companys had policies such as these, it makes the employees strive not to mess up and take too much time but also if there is a mess up and the policy is enforced, the customer is more likley to come back.

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  18. Stephen Swanson says:

    There are a great many everyday externalities society may soon be able to internalize by virtue of the waves of smart devices, the Internet of Things, smart sensors, RFID, social networking, and data mining. Given the means, perhaps the economics of resource exhaustion and climate change — and politics of public-risk-private-profit — will force absorption of externalities throughout economies. What externalities? Wasting someone else’s time is a clear and direct one. The profitability of industries from fossil fuel to fast food which drive the overuse and abuse of pesticides, herbicides, and antibiotics in large scale commercial agriculture (to name a few) are more subtle and disconnected, but may one day be priced into that bacon cheeseburger and ten-thousand-mile salad.

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  19. Travis says:

    US bank used to do this. They had a policy that if you waited more than 5 minutes they will put $5 into your account. I only saw benefit from it once, but it was kind of nice.

    On the other hand, this seems to scream cobra effect, and at the time I couldn’t figure out how they would deal with people who just formed impromptu “rushes” at banks, netting $5 per person, essentially.

    Seems like a bad policy.

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  20. Andy says:

    Why on earth is Bill Gates’ time more valuable than yours? Because he makes more money? Because he’s run a multi-billion dollar company? Hogwash. For example, if your time in line prevents you from spending time with your kids, which I can guarantee you I do a lot more of than Bill Gates, then I might argue your time is more valuable than his. I swear this isn’t flame-bait. It’s definitely a rant, though. :)

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    • Daniel says:

      Bill Gates quit to spend time with his kids and to save millions of lives. Yeah, he’s pretty far up there along the time importance scale. Not for his $Bs but for his Bill and Melinda Gates Foundation time which really does save lives, lots of lives.

      Doesn’t all this talk about pizza delivery make you think of Snow Crash? It’s the only think we really do well. That and bureaucracy.

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      • Eric M. Jones. says:

        I read (and it would be easy to prove) that if Bill Gates saw a $100 bill on the ground, he couldn’t afford to pick it up. He’d lose money.

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  21. Jeff says:

    At least in my location, Sears has a hassle-free policy for online pickup orders. If they don’t bring it out within 5 minutes, their computer automatically prints out a $5 coupon. They even have a timer that counts down and I didn’t even know about the policy until they handed me the coupon.

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  22. Imad Qureshi says:

    I think its more of a good customer service gesture than compensating monetary damages caused by making someone wait, because as you said for some people the value of time will be much higher than company would be able to compensate. for example Chipotle once gave me a free Burrito and a bottle of water that I ordered because it took them more than 10 minutes to make it. I was on a busines trip so I didn’t care if it was free or not but it was a good gesture. I think company’s should let the front line employees decide what’s best for customer as is the case in Starbucks and Zappos.

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  23. Gordon says:

    As a bank employee, this is a bad precedent. Customers do not come into the bank in distributed waves. They often come in, in groups. At opening, lunch and closing.
    A conservative estimate would be 50% of business comes in during those times, which is only about 15% of the day. We’re going to be busier then. The only solution to it would be:

    1) Over hire, then pay people all day to only work for 15% of the day.
    2) Only pay employees when they’re working that 15%.

    Tellers are already grossly under paid for what is asked of them.

    I don’t like waiting as much as the next guy. However, every stand up comedian is right – the DMV is an awful place to go on the weekend. Because everyone’s going on the weekend.

    Per hour scheduling is not a realistic request of businesses or employees.

    If you hate waiting so much, you need to make it a personal priority to go in the down time.

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    • Donnie says:

      What banks really should do is shift their hours to times when it is feasible for their customers to go to the bank. If a bank is open 9-5, few customers are going to be able to come in during any time other than lunch.

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    • Nick says:

      It would be so much easier to operate if there weren’t those pesky customers, no?

      Here’s a revolutionary idea that seems to work for grocery stores, restaurants, retail stores, and many other venues that have to serve people: be open for business on nights, weekends, and maybe a few more holidays.

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  24. Dan says:

    I get this for plumbers and the like, but in the case of the bank, what’s stopping me from getting a bunch of friends together to mob the place and cause a demand spike? This smells of cobra. 😉

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  25. Dwight says:

    I did suggest to a GP once that if he kept me waiting 45 minutes again, my consulting hourly rate would apply. Never waited more than 10 minutes again!

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  26. emt.dan says:

    Interesting assertion, and argument. There was a discussion within my workplace a few years ago about whether doctor’s offices should pay or otherwise reward patients or customers when they are running late. If the patient is late, many practices charge a “convenience” fee, but the inverse seems to happen more often. Perhaps in other businesses the threat of lost customers drives punctuality?

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  27. Enter your name..Joel Presson. says:

    In this matter I believe it is the thought that counts. How your Dutch friend must have felt because a bank took time to “credit” his account for waisting his time was realized in the return business of a very satisified customer. I do not believe it possible to pay each person based on the self worth of an individuals time and stay in business. Can you imagine what everyone going to the bank during the busy times hoping to get paid. It would become a national past time for those on a day off.

    Better yet, I wish those annoying telemarketers would pay me for my time when they call at 8pm. At 8pm if I wanted to talk to them I would not be relaxing on the couch in this terrible recliner.

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  28. Ralph says:

    Deutsche Bahn used to credit you if there were delays all the way up to full fare. I am surprised you don’t know about more such cases. In Germany, I certainly expected some gratuity if I had to wait an inordinate amount of time, though I mostly dealt with premium service providers for that reason. Discounters could only be cheap and you wouldn’t expect that from them, but you’d ask anyway, I guess.

    On the other hand, I can understand why you might be puzzled as any service provider I have dealt with since I am in Canada can certainly be counted as cheap and would certainly not provide the type of compensation I was led to expect back in Germany.

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  29. Elliot says:

    It doesn’t matter whether a bank line is too long. Is the customer going to switch banks? Cable companies are similar. In Philadelphia, Comcast dominates the market. Customers won’t switch or give up on Comcast’s poor service mainly because of the access to Philly sports broadcasts. I propose compensation in forms other than money; coupons would encourage the customer to return. Money compensations are an expensive endeavor. It needs deep analysis to ensure the business won’t go bankrupt.

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  30. Bryan says:

    Here in Japan, Domino’s does this even now. You get 500 yen (~$6.23) off your next purchase if they fail to deliver within their stated time.

    Granted, they’re reliably late by a few minutes, so I mostly just consider it a discount and order a bit early.

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  31. Francesc says:

    In Spain, the RENFE railway operator used to give some money back if their high speed services were late by at least 15 min. But for their commuter trains, people will queue to get delay certificates so they can show them at work as proof of their reason to be late

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  32. Ken says:

    I sometimes wait weeks for a new ‘Freakonomics’ article, (which I never pay for). Please send me a check for every second of time I’ve wasted on the Internet.

    PS, if your Dutch friend doesn’t know about online banking and instead ‘walked into his bank for a short transaction and was kept waiting’, how valuable could his time possibly be?

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  33. Kevin Weiss says:

    Absolutely yes companies should pay us for waiting – especially if they are only open during “regular” business hours. Great topic that everybody who perceives their time as money can relate to.

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  34. service provider says:

    So we were told an angiogram just takes about an hour
    And here i am waiting 5 hrs later.and 1 hour after the test was started
    Should i be charging them for my time? Two weeks from now is the big one. And if all goes well we will be celebrating..cannot think beyond that point. So as far as i an concernef w building an enterprse things are more or less on hold. We all have to make choices. Mine was easy.. those waiting for the results will need patience. Anyway. As far as i am concerned it took me 50 yrs to get to this point. And if am not gonna give any more results away now.than were necessary to build a team effort.

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  35. Marc Resnick says:

    You are forgetting about the classic Dominos 30 minutes or its free. And in that case, you are waiting at home so it is not even that onerous, except that you are hungry.

    Of course, they had to cancel it because they screwed up the incentives for the drivers, who subsequently drove too aggressively and got into too many crashes. Unintended consequences anyone?

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  36. Ryan says:

    Sure companies should do this, and you should pay them when you waste their time. If you ask for help from a worker at Home Depot because you can’t find dry wall screws that will cost a dollar. The workers can carry around little tip jars on their tool belts.

    Not everything needs to be monetized. The market takes care of this by companies with long waits getting bad reputations. And as the author already pointed out, you can sometimes get recompense to an especially egregious offence by complaining.

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  37. Jaq says:

    Instead of paying compensation to people who can’t wait, why not pay people who can? Offer people a discount for waiting at the start, so you can serve customers in a hurry first. Or the other way round, offer faster service at a premium price. That way the business and the customer get an option that works for both, before the customer gets annoyed.

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  38. TimmyD says:

    You can achieve an efficient outcome through the existance of the market alone. If I am compensated for waiting or I have to pay in order to receive expediated service only matters from the point of view of income distribution not outcome (application of the Coase theory).

    From this point of view there are many companies that provide customers the opportunity to pay to avoid long waits. Airlines have expediated service for first class, many amusement parks now offer customers the opportunity to purchase an expediated line pass in addition to general admission. Want to get a table at a restaurant quickly then slip someone a $20. People’s who value their time high enough will higher and pay assistants to wait for them.

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  39. Ezequiel says:

    Actually McDonalds long ago has been offering deserts for free, for people that waited more than 1 minute for their hamburgers.
    Buenos Aires, Argentina.

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  40. Eileen says:

    Today we had an appointment with the hearing aid man. We were on time but waited two and a half hours to be seen! That’s a whole lot of our day gone to h—-

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  41. Amanda Golden says:

    American Airlines posted 5,000 miles to AAdvantage accounts for members who were delayed at LAX due to “mechanical problems” (suspicious due to ongoing union dispute). American Airlines also emailed us directly to apologize for any inconvenience and asked for the opportunity to better serve us in the future. This sets AA apart from airlines like United, which literally lost a child and only reimbursed her parents the fee charged to escort their child from gate to gate. Pathetic.

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  42. Reader says:

    When companies give us outrageously large service/ delivery windows and then cannot send someone out in time, either the delivery or installation fee should be refunded or there should be a discount.

    I no longer buy appliances from Sears. Once I had an item that required sevice; I was given an eight-hour (that’s no typo) delivery window. After numerous calls to the service center, I was advised that the service guy “should” arrive by 4:55 p.m. As far as Sears was concerned, as long as the guy’s car pulled into my driveway before 5:00, they had satisfied that eight-hour window — never mind that the job itself would take more than an hour.

    Foolishly, I went back to Sears some time later to buy an appliance. I was given a four-hour window for delivery and installation. I made it clear that I had afternoon appointments, and to me 8:00 – 12:00 meant the guy was leaving my driveway by noon. He arrived at 11:55. I sent him away, and I no longer shop at Sears.

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