When a payment is made, to a utility company for example, they expect payment usually within 2 to 3 weeks of your bill with a late fee attached if you don’t meet that deadline. When money is OWED from said company, they say 4 to 6 weeks for a refund. Why is there such a discrepancy in an age that I can Venmo someone and they have their money instantly?
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They know that if they give you the wrong amount, they’re unlikely to ever get paid back. The 4-5 weeks of time is spent in their fraud reduction processes to make sure that the refund is not a mistake. Many people check things because there are people (not you of course) who try to commit fraud against the corporation. Then they just toss it into their routine bank process, which probably runs once a week on payables.
It’s astonishing how important cash flow is to businesses. There is a saying in the business world: turnover is vanity, profit is sanity, but cash is reality. Major businesses have transformed their performance by changing from paying their suppliers within 30 days of being invoiced, to making those suppliers wait 60 days.
All of which is a long winded way of saying that it makes an appreciable difference to a business if they can hang onto your money for a few extra days. Not your money individually, but the money that they owe customers collectively.
And it’s easy money, because what can you do to hurry them up? You would have to vote in politicians who promise to bring in regulation to reduce refund delays, and does anyone really care about a few days enough to do that?
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