checking

Will paperless statements set you free?

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Highlights
  • "Only about 13 or 15 percent of consumers receive only online bills."
  • Some billers have tried and failed to institute a fee for paper statements.
  • Experts predict that eventually almost all bills will be online.

Paperless statements offer something that very few products or services can boast in today's world -- less stuff to throw away or clutter your space.

Despite that, very few consumers have turned off paperless statements entirely. In order to nudge customers in the direction of online-only statements, financial institutions have rolled out several incentive strategies.

"Only about 13 (percent) or 15 percent of consumers receive only online bills," says Josh Wendroff, director of marketing for Regulus, a payment processor and bill presentment provider.

"The move to paperless statements has vexed a lot of companies," he says.

Various strategies for promoting paperless

No one approach works for every customer and some can actively turn off some consumers.

Some incentive strategies are positive; for instance, in the past, JP Morgan Chase paid customers small amounts of money for turning off their paper statements. Other banks, such as Wachovia, give customers a chance to win a big pile of money if they sign up to receive statements online exclusively, by entering them into a sweepstakes to win $25,000.

Other institutions have gone the negative reinforcement route and charge money or deny access to online features in return for sending paper statements.

"A negative incentive is that we'll charge you $1 if you want to continue to receive paper or you won't have access to your online archives if you want to receive paper," says Wendroff.

Some billers have tried and failed to institute a fee for paper statements, as T-Mobile infamously did last year which resulted in a near revolt by customers.

"If you don't properly prepare the message that can really turn people off," Wendroff says. "There are a lot of ways that you can couch it that are more acceptable to consumers."

Obviously, when companies begin charging for something that has been free forever, a few ruffled feathers would be expected.

"It's sort of an interesting push and pull within these companies on how to address consumer concerns while addressing their economic concerns," says Wendroff.

"A lot of companies are forcing you to turn off the paper if you want to view your bills online. Even that is making a lot of consumers at best a little unnerved (and) at worst, angry," he says.

Marketing the right message

In a 2010 study, Javelin Strategy and Research found that consumers respond most to marketing messages that emphasize reductions in clutter, reducing the impact on the environment and security.

Extra services and benefits can also be found at some banks. Citizen's Bank instituted a program called Green$ense in 2008 that reimburses customers for electronic transactions and turns off paper statements.

At HSBC, customers who sign up for e-statements and have earned at least $10 in interest can view and print the IRS form 1099-INT that shows interest income.

Consumers' personal biases will determine which message shifts them definitively into receiving only online statements. A study from Forrester Research in 2008 found that if nothing else works, many holdouts in younger generations can be bought for a mere $5.

Older Americans still want more storage space though, Forrester Research found.

"You get to keep typically six months' of statements online," says Rory Rowland, a consultant to financial institutions.

"But you can also keep them in a file on your computer, it's just much easier," he says.

Experts predict that eventually almost all bills will be online, but when that will happen is anyone's guess. If your bank offers an incentive for switching, it may be worth taking advantage of -- if decluttering and saving paper don't do it for you.

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