Improving the effectiveness of banks’ service guarantees: Customers’ awareness and perceived value of the wait-time guarantee

Improving the effectiveness of banks’ service guarantees: Customers’ awareness and perceived value of the wait-time guarantee

As part of the general questionnaire, all respondents were asked to indicate if they were aware of the wait-time guarantee at their branch. Approximately two out of five (39.5 per cent) indicated that they were aware of the guarantee. The remainder (60.5 per cent) were either unaware or not sure about the availability of the guarantee. Before asking about the perceived value of the guarantee, the un­aware group was given an exact description of the guarantee. Then, all respondents were asked to indicate ‘of what value was the wait-time guarantee to them’. Of all respondents, 57.9 per cent said the guarantee was of great value, 24.6 per cent of some value and 17.5 per cent of no value; as can be seen, the large majority found value in the guarantee. An additional analysis of perceived value by prior awareness found no statistically significant differences. In other words, both consumers who were previously aware of the guarantee, and those who were told about it during the study, found the guarantee to be of value.

To understand better which customers value the guarantee more, the responses to this question were analysed as a function of respondents’ prior waiting experience. Table 1 reports the results of this cross- tabulation. The findings indicate clearly that the guarantee is valued differently by these segments. It is least valuable to those who experience delays ‘almost always’; 37.5 per cent of this segment indicated that the guarantee has no value to them. By contrast, only 15.7 per cent of the ‘occasional wait’ group indicated that the guarantee was of no value to them. These findings underline the fact that the guarantee is of far less value to customers who experience frequent delays; they would like the bank to fix the service delivery system and are less concerned with monetary compensation. Moreover, these data reinforce the observation that customers value the guarantee principally for its assurance of consistently good service.

Table 1 Perceived guarantee value by prior wait experience (n = 537)

Perceived guarantee value

Occasionally %

Prior wait experience Most of the time %

Always %

Great value




Some value




No value








Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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