When a Short-Term Hit is Better than a Long-Term Contract; or Why DirecTV can Kiss My Lily-White Tush

UnicornRedheaded rant alert...though you may have already gathered that from the title of this post. I recently switched from DirecTV to AT&T U-Verse. Once my U-Verse was successfully up and running, it was time to make the dreaded cancel call. You know the drill - we ignore our current customers in lieu of bringing in new ones until the current customer leaves for greener pastures. Then it's, "Oh please let me kiss your ass and feed you bon bons and give you discounts and blahblahblah"

Yeah...too little, too late, Princess.

I predict the fuss will be minimum since my original contract is expired.

Or so I thought.

When DirecTV was originally installed I received a shoddy DVR that froze and died in less than a year. Customer service was fabulous and said they would send me a new receiver. However, in a less fabulous move, they didn't bother to tell me that my contract was extended 24 months from that new point. I'm now told I'll be hit with a $100 early cancellation fee for leaving.

Klassy.

Yes, the "k" is on purpose.

This rep is insistent that she's trying to save me the cancellation fee money while also offering me discounts and unicorns farting glitter rainbows. However, she is absolutely NOT saving me money and here's why, Sunshines:

In the switch I'll save $80 per month meaning I'll recoup the cancellation fee in less than two months. MUCH better than being saddled with the added expense on a service I didn't like for 5 months. In the end, I'm still saving money (as well as frustrated energy) by switching and taking the $100 hit.

Do you have a similar situation happening somewhere in your life? Is there something you're hesitating on because you don't want to pay a cancellation fee of sorts. Well Sunshine, it's time to do the math and see if your money is better served taking a short-term hit for the long-term gain.

  • Add it up: what is the cancellation fee vs. the monthly fee for the remaining time left on the contract. If the cancellation fee is less, go for it. Perhaps the situation is like mine that the overall savings to switch is so great that you'll easily get that money back very quickly.
  • When making the cancellation, stand firm. Their job is to keep you and take your money. Your job is to keep as much of your money is possible. If the person on the other end of the line was setting your money on fire, you wouldn't stand for it right? So don't let them convince you otherwise. This is why we crunch the numbers first. It's easy to stand firm when armed with knowledge. (Side note: don't be an asshole about it. At the end of the day, their job kinda sucks. There is NEVER any reason to yell. Just tell them you've done the numbers and nothing they say will sway you.)
  • Celebrate having taken a close examination of your numbers and whittled away things that were taking your money while not serving you. Just like with the physical clutter, there are often random monthly services that are taking up space in our budget. Clearing these away creates the space so that we can use that money for things that we will need, use and love!

Have you recently cut things out of the budget that you weren't using, even if it came with a hefty cancellation fee or pushy salesperson? Tell us about it in the comments!