Penny-Wise, Pound-Foolish

Delta Airlines beat a hasty retreat on an extra baggage charge for returning U.S. soldiersDelta Airlines proved the old adage true last week that trying to squeeze a penny out of a sale can bring down a ton of bad press.

A YouTube video titled "Delta Airlines Welcomes Soldiers Home" shows two soldiers returning from Afghanistan who say the airline charged them $200 apiece for a fourth piece of luggage, which contained their military-issued weapons.

As the Associated Press reported: With a bite to his voice, Sergeant Fred Hilliker of Allendale, Mich. closes the video: "Good business model, Delta. Thank you. We're actually happy to be back to America. God bless America. Not happy, not happy at all. Appreciate it. Thank you."

The video was posted Tuesday and by the next day there was a Facebook page calling for a boycott of Delta Airlines.

Airline officials responded quickly by apologizing to the soldiers and modifying their baggage charge policy for returning soldiers, but apparently not before some dissembling and confusing steps to get reimbursement for the charges from the Department of Defense for the charges.

Apparently Delta isn't alone in charging soldiers for more than three bags. But that doesn't make the policy any savvier.

"The incident underscores how quickly a company's reputation can be tarnished when a Web video, online picture or posting goes viral," observed the AP reporter covering the story. "Airline passengers have made no secret of their hatred of baggage fees, which have become common in recent years."

Instead of a lame blog posted by an anonymous customer service representative, Delta Airlines would be better off empowering its front-line employees to make smart decisions at the point of customer contact. And if you don't want to rely on the wisdom of airline clerks, then the top brass should be alert to how company policies can explode in their face.

The incident generated loads of critical comments on the Web and attracted negative national media coverage for Delta Airlines. A Congressman from Iowa said he flies Delta regularly, but pledged to choose another airline if the soldiers weren't reimbursed and its policy changed. This is the kind of comment that leads to legislation. Just ask the large banks that charged high swipe fees on debit cards. In response to complaints from bank customers, Congress this week let stand legislation that will allow those fees to be cut sharply.

Head-down policies and practices may generate some cash, but they also can ignite an online wildfire. Businesses, non-proifits and public agencies should balance what it takes to make a buck with customer reactions to the fairness of what they charge.