• Julia Corsetti

Businesses Under The Microscope

From the corners of California to the skyscrapers of New York City, there is unrest all around.

And amidst this grinding to a halt of nearly every gear in the economy, there is the added aspect of the human reaction when it comes to business decisions, and the response of the public to those choices.

The biggest upset nationally has been airlines. Today the Department of Transportation issued guidelines for passenger airfare, the enforcement notice announcing that “passengers should be refunded promptly when their scheduled flights are cancelled or significantly delayed.” This is good news for those customers whose flights were changed by the airline, but still leaves many grounded with flight credits rather than cash in hand.

The word from Travelers United is: “When passengers cancel flights, they lose. Airlines win. With a nonrefundable ticket, that’s the inconvenient truth.”

Other companies, like many car insurance agencies, are getting themselves some brownie points with refunds or credits. As most people are using their vehicles less, it makes sense to give back. Additionally, it’s goodwill and good PR in this chaotic and concerning time.

Boston Sports Club on the other hand is not making members happy with its response to the pandemic. As complaints to the Attorney General roll in, members are suing the gym for continuing to collect monthly fees while shut down.

“They shut their facilities, shut down the phone lines, and made it impossible to quit,” Lenny Kesten, the lawyer for the plaintiffs told the Boston Globe. “It’s appalling behavior to take people’s money when you know you’re not providing them with a service.”

StubHub is yet another merchant caught in the worst of the Coronavirus storm. Their decision to stop issuing refunds was not well received.

In an interview with Axios, Stubhub president Sukhinder Singh Cassidy said:

"We have a situation right now where we had over 20,000 events canceled, basically at the same time. In addition to our buyers, we also have a million sellers on our platform, all of whom are trying to figure out how they're going to get recouped from the original seller — the venue, the team, the artist — and the timing delays are going to be significant. In normal times, we would take the risk of giving refunds to buyers before recouping the same refund from the seller. At regular volume, we can afford to take that risk. But these are unprecedented times."

We are all in limbo in many ways, and while we know the world will eventually get back to normal, it is still important to act strategically during this crisis. Business decisions made now will affect companies’ standings in the future. As Mark Cuban said in an interview with WBUR, "This is a time as a reset where we really have to reevaluate how we treat workers, how people are paid."

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