On November 19, 2011, I mailed a letter to Dave Leach, President and CEO of Greyhound Bus Lines. The text of the letter is listed below:
Mr. Dave Leach
President and Chief Executive Officer
Greyhound Lines, Inc.
P.O. Box 660362
Dallas, TX 75266-0362
November 19, 2011
RE: Change.org Petition to End the $18 Gift Ticket Fee
Mr. Leach:
My name is Shawn Ambrose and I am an Assistant Professor of Business Administration in the Keith Busse School of Business and Entrepreneurial Leadership at the University of Saint Francis, Fort Wayne, IN. The views in this letter are strictly my own, and do not represent an official policy or opinion of the University of Saint Francis. However, under the guidelines and privileges of academic freedom, I believe that in addition to my expertise, that as a faculty member at a Franciscan University, that I have a moral duty to speak out on a business practice that I believe is unfair.
On October 7, 2011, I initiated an online petition campaign asking Greyhound Lines, Inc. to discontinue the practice of charging an $18 fee for third party e-purchase transactions (aka “Gift Ticket Fee). As of the writing of this letter, almost 7,000 people have signed the petition. In my opinion, the Gift Ticket Fee exploits those who are trying to assist a person in need, or to pay the fare for a friend and/or family member to travel. Second, the explanations that the fee is a handling fee and/or anti-fraud measure are not persuasive when critically examined. Lastly, I will state why I believe the Gift Ticket Fee is a poor business practice, and give my recommendations for eliminating the fee.
The Gift Ticket Fee is Exploitive
As of December 4, 2010, the following demographic information was available on your website:
• The average ticket price was $48
• The majority of Greyhound passengers travel to visit family and friends
• Nearly 60 percent of Greyhound passengers travel less than 450 miles.
• Two-thirds of Greyhound passengers earn less than $35,000 annually (Greyhound Lines, 2010)
Based on these data, it is clear that Greyhound targets lower-income customers, based on the fare structure and the preponderance of lower income customers. Given these data, the Gift Ticket Fee, on average, is a 37.5% markup. In addition, for a popular short-haul schedule, the Gift Ticket Fee can exceed the cost of the ticket.
Besides the financial data, the Gift Ticket Fee is a hardship for many families. David Henderson, an advocate for the poor, decided he would purchase a bus ticket to help someone move to another city to get a start on a better life. David’s words speak to the unjustness of the Gift Ticket Fee:
I have always known that being poor is expensive. When I was providing direct services to low-income individuals and families it seemed they would get caught in an endless web of miserable ticky-tacky corporate fees and fines. But my experience with Grey Hound (sic) was the first time I have been directly impacted by a corporate culture that kicks the crap out of poor people, knowing they have no voice with which to complain (Henderson, 2011).
In addition to David Henderson’s account, I encourage you to read the numerous comments about the hardship the Gift Ticket Fee has created for your customers.
The Gift Ticket Fee Does Not Stand Up To Scrutiny
Your company representatives have stated the Gift Ticket Fee covers the expenses for handling charges and is an anti-fraud measure (Swain, 2011). Based on job analysis and statistics from the credit card industry, it is clear that neither of the two reasons stands up to scrutiny.
The Gift Ticket Fee applies to all third party e-transactions, whether the ticket is mailed to the intended user or picked up at the terminal. For a ticket which is being mailed to the intended user, there is no additional work required for the processing of the ticket, since the ticket purchaser is entering all of the information at the Greyhound web site. The ticket is printed and mailed. There are no additional steps needed by Greyhound employees.
When a ticket is purchased for pick-up at the Greyhound terminal, I believe that, while an employee must perform steps to process the transaction, that the steps are significantly reduced for a Gift Ticket which is picked up at the terminal rather than having the buyer make the trip to the terminal. I have listed the steps listed for each transaction in the table on the next page.
| Greyhound Employee Steps | Terminal Gift Ticket Transaction (Buyer travels to terminal for purchase) | Electronic Gift Ticket Transaction (Buyer purchases online) |
| 1 | Greet customer | Greet customer |
| 2 | Enters desired bus schedule | Verifies travelers ID and unique password for trip |
| 3 | Enters purchaser personal information | Prints ticket and baggage claim information |
| 4 | Enters traveler personal information | Directs passenger to gate – End transaction |
| 5 | Verify purchaser | |
| 6 | Processes payment – End transaction | |
| 7 | Greet customer | |
| 8 | Verifies travelers ID and unique password for trip | |
| 9 | Prints ticket and baggage claim information | |
| 10 | Directs passenger to gate – End transaction |
It is apparent there are more steps needed to process a “Gift Ticket Fee” in the terminal than electronically. Besides the inconvenience of having a purchaser drive to a Greyhound terminal to purchase a Gift Ticket, more labor is needed to process the transaction, which increases the labor cost.
Your representatives have also stated that the Gift Ticket Fee is an anti-fraud measure. With an average ticket cost of $48 and a Gift Ticket Fee of $18, the average ticket cost is covered by 2.67 Gift Ticket Fees. In other words, one out of every 2.67 Gift Ticket Sales are fraudulent. This defies logical explanation.
In an interview with the Toronto Star concerning the Gift Ticket Fee, Visa Canada stated that it was unaware of higher fraud rates in the bus industry ( Flavelle, 2011). When one considers that in 2010, online fraud losses were 0.9% (Digital Transactions, 2011), to infer that Gift Ticket Fee online fraud rates are 33% strains credibility.
A Call to Eliminate the Gift Ticket Fee
The Greyhound Gift Ticket Fee is a poor business practice. In my research, I have not found any business that charges a 37.5% markup for the privilege of conducting a third party transaction, including your competitors (MegaBus, Amtrak, etc.). As more people sign the petition and spread word of the petition through social media and other means, I anticipate the mainstream media will continue to cover the petition story. Media which have already covered the petition story include the Fort Wayne, IN Journal-Gazette, Cambridge Day, BusRide.com, and others. Your competitors will surely take notice – and as we move into the Christmas season, your competitors could use the “Gift Ticket Fee” against you.
I urge Greyhound to eliminate the Gift Ticket Fee immediately. The Gift Ticket Fee is unfair to Greyhound customers, not cost effective for Greyhound, and is not duplicated by your peers. I look forward to the courtesy of a personal response.
Best,
Shawn Ambrose, Ph.D.
Enc.: Change.org petition as of 11:45 a.m. November 19, 2011
Change.org petition comments as of 12:15 p.m. November 19, 2011
Screenshot Gift Ticket Fee transaction from Philadelphia, PA to New York, NY
Screenshot Gift Ticket Fee transaction from Philadelphia, PA to Pittsburgh, PA
C: Tim Newman, Change.org
Greyhound: Eliminate the $18 Gift Ticket Fee website
Works Cited
Flavelle, D. (2011, October 27). Greyhound fee angers customers. Retrieved from Moneyville: http://www.moneyville.ca/article/1075834--greyhound-fee-angers-customers
Digital Transactions. (2011, January 18). Online Fraud Rate Drops, But ‘Cleaner’ Fraud Poses a Bigger Threat. Retrieved from http://digitaltransactions.net/news/story/2878
Greyhound Lines. (2010, December 4). Greyhound Facts and Figures. Retrieved November 19, 2011, from http://web.archive.org/web/20101204033120/http://www.greyhound.com/en/about/factsandfigures.aspx
Henderson, D. (2011, February 22). Grey Hound Bus Wins War on Generosity. Retrieved from Poverty Insights: http://www.povertyinsights.org/2011/02/22/grey-hound-bus-wins-war-on-generosity/
Swain, G. (2011, November 7). Greyhound customers bark at $18 gift ticket surcharge. Retrieved from BusRide.com: http://busride.com/2011/11/greyhound-customers-bark-over-18-gift-ticket-surcharge/
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