If your Internet bill suddenly increases by $12, your airline miles stop going as far, or your streaming subscription quietly adds another fee, you’re not imagining it.
It’s what experts call the “loyalty penalty” and it has quietly become one of the biggest ways companies increase revenue. You stay there, prices go up and loyalty ends up costing you.
But the good news is that these increases are usually negotiable, as long as you talk to the right person. Take it from a pro: Investor and “Shark Tank” star Kevin O’Leary says he combats rising prices by asking to speak to a specific person.
When a price increase appears on your bill, who you talk to matters.
“I always call to see an invoice and say, ‘Let me talk to your retention officer.’ Avoid dealing with the sales rep, because only the retention officer can close the deal,” he said (1).
A retention officer (sometimes called a customer retention specialist) has one job: to keep you from canceling. They are generally the only person authorized to:
Financial software company Vena Solutions reports that when customers escalate calls, retention teams can successfully maintain 67% to 84% of accounts across various industries by offering targeted incentives. (2)
And companies fight hard to retain it. Research from Outbound Engine shows that acquiring a new customer can cost five times more than retaining current consumers (3). ThinkImpact reports that 65% of companies’ revenue often comes from loyal customers, so many companies offer perks to retain their followers (4).
For example, it costs a company money to pay an employee to come to your home and install your Internet service, in addition to paying for the equipment used to do so. An existing customer gives money every month without costing the company anything extra that it would cost a new customer.
Companies have learned that most people simply won’t change. And because of that, loyalty programs and long-term customer relationships can become traps that mask ever-increasing costs.
This is how prices increase on common services:
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Streaming services: Major players such as Netflix, Disney+ and HBO Max increased prices by around 20% in 2024 (5).
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Internet and cable plans: American households now spend an average of $1,063 a year on Internet and cable (6). These costs typically increase once promotional rates expire.
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Car insurance inflation: Auto insurance rates peaked at 23% in 2024, driven by higher repair costs, more expensive replacement parts, and higher litigation expenses (7).
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Airline loyalty programs: Points used in these programs for loyalty benefits have devalued by an average of 36% since 2019. Even long-time frequent travelers are finding it more difficult to redeem rewards without paying additional fees (8).
Rewards programs, points systems, automatic renewals, and “members only” benefits often create the illusion of savings while prices slowly rise. Here’s why these programs cost you more over time:
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Tier systems encourage overspending: Airlines and hotels design their tiers so that you need to keep spending to maintain your status even if there are cheaper options elsewhere.
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Automatic renewal prices hide increases: Subscription services rely on the fact that most people never look closely at their statements.
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Points and benefits are silently devalued: What used to cost 20,000 points can now cost 28,000, which means you are effectively paying more without realizing it.
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Competitors offer better prices, but only to new customers: Internet providers offer $49 plans to new customers, while loyal customers may unknowingly pay $89.
Bottom line: Loyalty programs make switching emotionally costly, even when it’s the financially smartest decision.
You should come prepared when you call your provider. Here’s how to maximize your chances:
Start by researching current promotions available to new customers to know what deals are on the table. You can also get quotes from competitors and refer to them during negotiations.
You can request your previous promotional price. Many companies would rather offer a discount than lose a customer.
If they don’t reduce your bill, ask for perks like free months of service, waived upgrade fees, or extra loyalty points to offset the costs.
Whether it’s your internet bill or your insurance premium, companies rely on you to keep quiet. But with a few minutes on the phone, you can cope with the rising costs. And even if your provider refuses to budge, you still have leverage: Shopping around for rates at other companies, switching to a promotion for new customers, or bundling services elsewhere can often save you far more than a single discount ever could.
The key is to remember that you will never be stagnant and that there are always options to reduce your bills.
We rely only on verified sources and credible third-party reports. For more information, see our editorial guidelines and ethics.
Kevin O’Leary (1); Vein Solutions (2); Output motor (3); ThinkImpact(4); MentalFloss(5); LiveNowFox(6); Yahoo Finance (7), (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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