Why do all phone cards have surcharges?
The phone card business is not what is was a few years ago. Every new telecommunications product that comes along, has a product life cycle of about four years at which time something new and better comes along, and so begins a downward trend. There are still millions of phone cards being purchased every day at this country in convenience stores, gas stations, online websites, newstands, and at various ehnic restraunts, ethnic grocery stores, and ethnic import stores. While many international phone cards represent excellent value when calling your home coutnry, Why is it that almost every phone card advertises more minutes than it delivers?.
First let's understand the trend.
When phone cards first hit the market in the USA, calling cards were advertising and giving about 25 domestic minutes on a $10 phone card. This was a good deal, since long distance credit cards issued by the phone companies such as AT&T, MCI, Sprint, and others were assessing a surcharge of about $1.50 to make a call using a long distance calling card. Most of the early phone cards disclosed and assesed a connection fee on international calls of $1.00/
As technology made it easier to get into the calling card business, competition for minutes began to heat up. While the actual cost of long distance minutes was coming down, phone card companies were struglling with the hidden costs of issuing phone cards. For example, the cost of making a phone call to Nigeria includes an inbound 800 number (or local access number) leg and an outbound international leg. The phone card issuer has to pay for the inbound 800 number leg, even if the call does not complete to Nigeria. Typically this might result in 20 "incomplete" calls billable to the phone card issuer, for every one billable phone call to Nigeria, especially if there is a poor quality service in the local Nigeria community. Phone card companies who did not adust for these costs, ran up big debts and often went out of business. Soon the hidden surcharge was invented to deal with these costs.
calling card surcharges were disclosed.
At the begining (around 1985), phone cards were such a good deal, most phone card companies were run by honest techno-entreprenuers, who disclosed their surcharges. For example, a typical surcharge was $1.00 for each international call; and the phone card delivered the advertised minutes after deducting $1.00 for the call. The poster adjusted for the connection fee, so that a $10 phone card with a connection fee of $1.00 and $.10 per minute, would announce and deliver 90 minutes on one call, 80 minutes over two calls, etc. The surcharge was only deducted for completed calls. This covered the cost incurred by the phone card company for all the uncompleted calls. But as competition heated up, phone card companies began to find that the consumer would prefer to buy a phone card with smaller connection fees. So advertised connection fees began to come down, but phone card issuers applied other surcharges and named them "communication taxes". This resulted in the birth of the hidden fee. Phone card industry soon came up with all sorts of ways to increase the advertised minutes on a calling card, while delivering fewer minutes than advertised. This practice has continued to this day, to the point where virtually no phone cards delivery advertised minutes on multiple calls over a period of weeks. Most if ano all phone card companies charge some combination of call connection fees, long call surcharges, activation fee after the first completed call, daily or weekly maintenance fees. More often than not, these fees are not accurately disclosed. Moreover, it is common for card issues to juice up the fees to certain contries on a temporary basis if they find that consumers are actually using the card to call the countries with the most advertised minutes. The president of a well know Florida based phone card company claims these temporary fees are justified when consumers "bastardize" his phone cards, by making calls only to the advertised countries.
is the best way to compare phone cards?
First, know that all phone card companies cheat on their minutes. All of them, including AT&T, MCI, Sprint, as well as the thousands of smaller phone card companies advertise more minutes to a certain country than they deliver over multiple calls.
Bait and switch
Keep in mind that almost all phone card companies reduce or eliminate their fees altogether during the first 30 to 90 days of a new card release. Once the card is popular with consumers, stores and distributors; the fees begin piling up. It is reasonable to assume that phone card companies who issue one or more phone cards every month for calling to the same region of the world, are doing so specifically with the intention of jacking up the fees after a few months on the older phone cards. The big phone card companies have actually turned this into a science. They know exactly how much money they are willing to loose at the begining on a new phone card, so they can make it up later on with hacking fees. Consumers will generally do good to jump on the new phone cards issued by companies who have issued good phone cards in the past.
How to test a phone card:
Try this if you wish to test any phone card to any specific country (if you find one to be good, we certainly want to know about it)
1. First buy a phone card based upon the minutes listed on the point of sale phone card poster displayed in the convenience store, gas station, restraunt, or ethnic store.
2. Write down the number of minutes advertised on the back of the phone card, while you are in the store.
3. When you get home get some paper and write down the name of the phone card, the date, the country you plan to call, the city you plan to call, and the destination phone number you plan to call, and the minutes advertised on the phone card poster to that country.
4. Get a good timepiece. Preferably one with a second hand, or a stop watch.
TEST CALL #1
5. Now make a test call. On your paper write test call #1. Write down the date and time of the test call. (Remeber to write down the country, city and dialed number)
6. Usually, you will get an announcement telling you how many minutes you have remaining for this phone call. Write down the announced minutes and hang up immediately. Were the announced minutes the same as the minutes advertised on the poster?
(now in theory, you have not completed a phone call, so your phone card should not be debited.)
TEST CALL #2
7. Now write down on your paper Test call #2, then repeat the exact same process once again. Remember to write down the date and time of the test. Write down the the announced minutes.
8. THEN HANG UP immediately after the announcemnt..
Note: Did the announced minutes change from the first call to the second call?
TEST CALL #3
9. Now if you are paitent, put the phone card away, and wait until tomorrow. This will tell you if the phone card company charges an activation fee even if you do not complete a phone call. Some cards charge an activation fee immediately after the first call while some charge the activation fee at midnite after the first call. Most will not charge anything if the call is not connected. But some large big name companies charge an activation fee as soon as you enter the pin number!
10. Now we are ready to see what happens with a completed call. Write down the date, and time, and make a call to the same destination. Write down Test Call #3 on the paper. This time let the party at the other end answer, but tell them quickly that you are making a test call, and that you will call them back in a few minutes. Make sure you are on the phone call for less than one minute.a. This time, write down the exact time you finish dialing the 800 number or the local access number.
b. Then enter the pin, and write down the exact time you finish entering the pin.
c. Next enter the destination number, and write down the exact time you finish entering the destination number. Make a note of the announced minutes.
d. Then write down the time when the dialed party answers the phone
e. Finally write down the time when you hang up after about 30 seconds.
f. Calculate the actual minutes and seconds of elapsed time from when the dialed party answers until you hang up. This is the call duration.
Now the fun starts.
TEST CALL #4
11. Make another call marked as TEST CALL #4 to the same phone number.
a. note announced minutes.
b. record start time (as soon as party answers) and end time (as soon as you hang up)
Note the difference between the advertised minutes and the announced minute after you only one completed 30 second phone call. Is there a significant difference?
TEST CALL #5
12. Now make another call TEST CALL#5 using approximately 25% of the remaining minutes.
a. once again write down the date, start time of call, end time of call, announced minutes
B. Write down the actual minutes talked (minutes and seconds)
By now you have a good idea if the phone card company is assesing hidden surcharges. But watch what happens next.
13. Once again put the card away until tomorrow.
TEST CALL #6
14. Make one more additional calls to the same number and mark the call asl TEST CALL #6.
a Remember to record the announced minutes for each additonal call, the date, the time, and the actual used minutes.
The variance between advertised minutes and delivered minutes will be more dramatic if you wait one week before making subsequent calls after #6.
TEST CALL #7
15. If there is additional time remaining on your phone card, go ahead and use it up over one or more calls, recording the date, time, duration, and announced minutes before each call.
One final test in order to see how your phone card performs "advertised" world is get a second phone card (same brand and denomination), and use it to make one long phone call. Record the date and time, the announced time, and the actual time from answer until the card is consumed, or until the phone card company disconnects or drops the call.
Now once all of this testing is done, if you feel you are not happy with the results, you can contact customer serviceat the customer service number on the back of the phone card and explain to them that you conducted a test, and let them know what you found. If you did not get the announced minutes, you might ask the customer service representative to reinstate the entire value of your card; so that you can try again and make just one long phone call.
I do not recommend that you get nasty with customer service, or they will just hang up. Likewise, if you are not happy, I would not recommend you take it out on the store owner where you purchased the phone card, because they do not make the phone cards. However it might be a good idea to give your store owner a copy of your notes. Convenience store owners, gas stations, and ethnic stores value your business. They would much rather sell quality phone cards. I suggest you give the store owner a copy of your test notes.(There is little point in suggesting that you are going to go to the FBI, or FCC, or the Public Utility Commission. These agencies know what's going on, and if they wanted to prevent this sort of thing, they would have cleaned it up years ago.... however if you are really upset, you might complain to the State's Attorney General. However, unless the actual carrier and phone card issuer are located in your state, you will only be causing problems for some storeowner or phone card distributor who has no control of the surcharges.) It might also be fun to take your notes to your local newspaper. Remember, the guy who prints the phone card is often also a victim of the guy hacking the minutes. The biggest companies are generally the biggest offenders. They have lots of fine print disclosures on their phone cards that nobody reads.
What to do with your test notes
Finally, if you put your notes in a spreadsheet or email, and send them to email@example.com, we will publish the results or a summary of the results. Or you can mail a copy of your results, together with the used phone card to: Phone Card Hotline, 7324 Valleyview Drive, Independence, OH 44131.
More testing fun
If you contact http://www.hellocallingcards.com , (our online retail business unit) and tell them you wish to test a phone card to any of their popular calling destinations, they will generally give you one free calling card (if you purchase 3). For sure, if you find any phone card that stands up to this testing process and has no fees, we will most certainly want to know about it!