Intuit Inc. is apologizing to its customers for neglecting to tell them it was changing its business model – and to make amends, it’s offering them partial refunds and free upgrades.
The Mountain View, Calif.-based company came under fire in January, when the desktop version of its TurboTax Deluxe software began demanding users pay for an upgrade to finish their taxes, according to a story in Computerworld. Basically, users who were self-employed, investors, or rental property owners were told they needed to pay about $30 to $40 more to be able to access sections of forms required by law to finish their tax preparations.
Users were very unhappy, giving TurboTax just one star ratings on Amazon and decrying the company for sneaking in the demands to upgrade. While Intuit did issue an apology on its site, apologizing for not communicating the change and offering a $25 rebate to customers who had already paid the extra fees, customers were still dissatisfied with the explanation and demanded more.
On Jan. 29, Intuit president and CEO Brad Smith took to his LinkedIn profile to provide another mea culpa, with a post and video titled “Sorry Wasn’t Enough. Here’s What We’re Doing Now.”
“These past couple of weeks have not been our finest hour,” he said. “We’ve apologized for the way we’ve handled it … You’ve been clear about what would make this right.”
Smith added the company would be adding back its forms to the Deluxe edition of TurboTax in 2016, and that it will be offering free in-product upgrades to current owners of the software. It will also keep offering $25 cash-back to any customers who had paid for the upgrade, and it has already provided $10 discounts on its Deluxe, Premier, and Home & Business editions of the software, bringing pricing down to $60, $90, and $100 respectively.
The free product upgrades and $25 cash-back offers expire on Apr. 20, 2015.
The lesson here is that software companies need to do some serious thinking before changing their pricing structures – and that failing to warn customers beforehand can only result in a backlash.
There’s also the issue of competitors who will take advantage and move in – already, H&R Block is capitalizing off of Intuit’s woes by offering its own desktop program to TurboTax Deluxe users, free of charge. Even longtime customers remember when companies try to demand more money for the same products – and it may take some time before Intuit can regain their trust.