Your time, money, and patience might be valuable to you, but they mean so much more to the company’s bottom line.
A new study by the Groundwork Collaborative reveals that Americans are dealing with longer customer service wait times, paying billions in junk fees, and losing even more to healthcare hassles, setting the stage for what the group dubs the “annoyance economy.”
Junk fees for concerts, hotels, and food deliveries are costing Americans over $90 billion a year, the study found. By assigning a dollar cost to studies estimating the hours consumers spend on hold, researchers found Americans cough up over $21.6 billion in wasted time due to healthcare administrative hassles.
Companies are also getting a premium for your time. The time Americans spend on the phone with customer service has spiked by 60% over the last 20 years as companies pare back on customer service and make processes like getting a refund more difficult in the name of driving revenue.
These bogus fees and frustrating ordeals are part of the “vibes-based” tax companies are charging Americans to make every consumer interaction harder. Companies are relying on the lack of competition and onerous cancellation polices to trap consumers into services.
“We became very interested in how specifically a tax on time translates into both dollars and cents,” said Alex Jacquez, Groundwork Collaborative’s Chief of Policy and Advocacy. Jacquez said the report shows a “vibes-based analysis of the economy” in which “every consumer interaction is just harder than it used to be.”
Using existing studies to measure how much time consumers spend on frustrating tasks like staying on customer service or trying to cancel a subscription, researchers converted those times into dollars and cents. Calculating both direct financial losses and the monetary value of wasted time, researchers found Americans fork over $165 billion annually in the “annoyance economy.”
Wasting your time and money
Corporations are intentionally turning simple tasks into lengthy procedures to extract more profit, most obviously by renting services rather than outright ownership.
“One thing we want to talk more about is how the economy is becoming increasingly subscriptionalized,” Jacquez told Fortune. Driving a car means “you’re paying monthly to be able to unlock the full features of your car. It just feels like they’re trying to shift you into models that are guaranteed revenue streams, rather than just kind of buying and owning things.”
Making these subscriptions difficult to cancel can boost corporate revenue by more than 200%, the report found.
Healthcare costs and administrative hassles are no stranger to the annoyance economy either, with the study detailing nearly 80% of Americans report frustration over paperwork and coordination for insurance and medical appointments.
Companies also rely on roundabout AI-powered chatbots to create “headaches” to discourage consumers from seeking refunds or solving problems. Customer service, Jacquez says, is a field “where artificial intelligence is certainly going to” as one of the jobs that could be replaced. Customer service scores in 2024 hit a record low, and the “Consumer Rage Survey” found that 74% of customers reported a problem in the last year—double the rate recorded in 1976.
“As a human being, you don’t want to be sitting in a call center all day,” Jacquez said. “Maybe it is good that AI could potentially take over a customer service role, but I think if you look at how firms are actually implementing these solutions, it is almost always to extract more money out of their consumers, and to make these experiences more of a headache for them.”
The downsides of bad customer service
By reviewing suits filed with the Consumer Financial Protection Bureau (CFPB), the Groundwork Collaborative found that some banks used a “heavy queue” policy to intentionally drop calls before customers reached a representative. “The anticipation is that not 100% of these people would call back, and that if they did so, the process to get to an actual human being and somebody who could solve their problems would be more onerous and make them less likely to do so in the future.”
“There’s just really not a lot of downside to providing bad customer service, particularly in these chatbots and these automated kind of AI situations,” Jacquez said.
AI is also used in customer service settings—consumers are now being charged randomized, optional pricing to extract greater profits. Companies like Instacart are using AI software to randomize prices to find the optimal price point consumers are willing to pay for goods. Delta recently floated this idea for personalizing airline seat pricing.
AI has also disrupted the spam calling industry. Americans receive 130 million scam calls a day and over 20 billion spam texts a month. Over 85 percent of consumers report frustration with spam and scams, making it the “most annoying” issue.
Jacquez and the report do offer a solution: more government regulation. Polls show 68 percent of voters want Congress to prioritize addressing these annoying business practices. One proposal calls for federal regulators to impose monetary fines directly tied to the time consumers spend on hold or dealing with hurdles, making “annoyance” a liability for the company.
