Intuit backpedals from TurboTax changes after upgrade uproar
"These past couple of weeks have not been our finest hour," admitted Intuit's CEO Brad Smith in a video posted on his LinkedIn account Thursday. "We're taking new steps to make things right."
The fiasco over TurboTax -- what tax forms it supported in its Q&A-like interview process -- harked back to early January, when Consumerworld.org revealed that the desktop edition of TurboTax Deluxe omitted sections for forms required by the self-employed, investors and rental property owners. After buying Deluxe, as they had for years, users were told mid-way through the tax preparation process that they needed to pay more and do an in-place upgrade to deal with Schedules C, D and E.
Those extra fees ranged from $30 to $40.
Not surprisingly, long-time TurboTax users flipped out, excoriating Intuit for the secretive move, especially on Amazon.com, where they flooded the Deluxe version's review section with one-star evaluations and posted scathing comments.
Many saw the move as underhanded and nothing more than a "money grab" by Intuit.
Last week, Intuit apologized for the screw-up and offered a $25 rebate to customers who had already paid the extra fees to complete and file their federal returns.
"We messed up. We made a change this year to TurboTax desktop software and we didn't do enough to communicate this change to you as proactively and broadly as we could or should have," wrote Sasan Goodarzi, the general manager of TurboTax, on Intuit's website. "I am very sorry for the anger and frustration we may have caused you."
Goodarzi's explanation and apology did little to calm riotous customers.
On Thursday, Smith stepped into the fray, telling customers that returning desktop TurboTax Deluxe customers would be able to upgrade within the product to Premier for free. The latter supports Schedules D and E, but not Schedule C -- necessary for sole-proprietor businesses -- which requires Home & Business.
Deluxe lists for $70, while Premier and Home & Business retail for $100 and $110, respectively, although Intuit and most retailers discount all three. This week, for example, Intuit cut the prices of the desktop editions by $10 each, to $60, $90 and $100 for Deluxe, Premier and Home & Business.
Intuit will also continue to offer $25 refunds to those who already paid the upgrade fees and filed their returns. Although the $25 may not cover the full upgrade charges, Intuit claimed that, what with discounting at retail and by the company, the amount was the average surcharge.
Smith also promised that Intuit would restore the missing interview sections to TurboTax Deluxe for 2016, but did not say whether that would be accompanied by a price increase.
H&R Block, long locked in a fierce battle with Intuit for U.S. tax preparation market share, took advantage of the TurboTax fiasco to run a customer theft campaign under which it offered its own "Deluxe + State" desktop program free to those who had already purchased TurboTax Deluxe.
The TurboTax debacle was a clear message to software makers who significantly change their products without telling customers.
Intuit wasn't alone in facing customer pushback: Microsoft, for instance, was hammered over both Windows 8 and Windows RT for not plainly communicating those 2012 operating systems' shortcomings. Although Microsoft did not follow Intuit's exact path to recovering customer goodwill, it obviously learned a lesson, retreating from the no-Start-menu of Windows 8 and effectively dumping Windows RT by developing a more cohesive and palatable Windows 10, which will be offered to consumers as a free upgrade from Windows 7, 8 and 8.1.
Smith had some hard-earned advice for others who dared to cross customers. "Reach out and share why you feel the change is necessary, asking for their input on how best to manage the change," Smith recommended, ticking off other common sense practices, including easing customers into a transition and -- shocker -- "listen for the feedback and move quickly to acknowledge you've heard it."
Comsumerworld.org's Edgar Dworsky wasn't so sure Intuit absorbed the lessons Smith touted. "Intuit was taught a valuable lesson (again), but its history of practices designed to gouge its customers suggests it probably hasn't really learned anything," Dworsky wrote on his website today.