Intuit: Adding Burdens on QuickBooks Clients

SAN MATEO (03/20/2000) - As the software company that perfected such marketing tactics as nagware and forced product registration, Intuit is a company we need to watch closely. And sure enough, Intuit Inc. once again appears to be pioneering new ways to squeeze a few more dollars out of its customer base.

Many QuickBooks 2000 customers have been upset that they are now required to subscribe to Intuit's $72 per year Basic Payroll service if they want to use the program's payroll calculation feature to figure deductions. Intuit's revised policy concerns them on several counts. Those upgrading from previous versions often could not tell the policy had changed from the somewhat cryptic notice on the package, and many said they might have chosen not to upgrade had they realized they would have to pay extra for the payroll feature. Of even greater concern is the amount of personal information Intuit requires from payroll subscribers and the requirement that they download new tax tables at least every 45 days.

"The latest version of QuickBooks Pro [2000] will not let you use the payroll tax table calculation feature until you sign up online for a year's subscription to [Intuit's] payroll service, at $72 per year," wrote one reader.

"Not only that, but you must log on at least every 45 days and update it or it will cease to work. In addition, you have to give [Intuit] (among other information) your Employer Identification Number ... [previously] no private information was required."

For some time Intuit has charged a subscription fee to those who wanted to receive tax table updates, but many chose to use the original tax tables and then calculate their own changes. As we noted last year, Intuit made this tactic more difficult with QuickBooks 99, zeroing out all manual entries of deductions after each payroll if you had not downloaded the new tax tables.

Then, as now, Intuit's justification for forcing non-subscribers to enter or re-enter deductions manually for each payroll check they write has been to ensure that customers stay in compliance with ever-changing federal and state payroll tax regulations, citing statistics that 30 percent of small businesses are penalized each year for inaccurate payroll filings.

This paternal concern for its customers might have more credibility if Intuit were willing to take responsibility for inaccurate payroll filings by a Basic Payroll subscriber due to an error in Intuit's tax table updates. But it's no surprise that Intuit does not guarantee the accuracy of its tax table updates.

"The tax tables are accurate to the best of our knowledge, but we don't guarantee that for users of the Basic Payroll service," says Jennifer Martin, marketing manager of QuickBooks payroll services. "The Basic Payroll user is still responsible for checking that information." Intuit will pay penalties for inaccurate filings on its Deluxe Payroll service, according to Martin, as there Intuit actually functions directly as a payroll service for the customer.

One has to suspect that Intuit's true motivation may have less to do with making sure customers are in compliance and more to do with maximizing Intuit's earnings. Even customers who willingly subscribed to the service have had their suspicions raised by the personal information Intuit requires them to provide.

In particular, some readers were puzzled as to why Intuit requires their EID (Employer Identification Number).

Accountants who use QuickBooks to do payroll for more than one client had real concerns about the EID requirement. As the password a user receives to access the tax table updates is tied to the EID, this means accountants would have to purchase a separate subscription for each of their clients. By the time I spoke to Intuit officials, however, they had already heard enough protests from such customers that they had dropped the separate subscription fee for multiple clients.

Although accountants don't have to pay for each subscription, they are still required to provide the EID for each client. This leaves some feeling uneasy, partly because they feel Intuit's Deluxe Payroll service is targeted at small businesses of the same type as the accountants' clients, so how can they be sure they aren't handing over their client list to a competitor? Given Intuit's predilection to use every marketing angle it can, that might not be total paranoia. But Martin and other Intuit officials insist Intuit is using EID numbers only to provide a unique identifier for each account, and they stated categorically that Intuit will not use the EID numbers for marketing.

Although we can therefore have a reasonable hope that Intuit won't try to steal its customers' clients, one never knows what scheme its marketing troops might come up with next. When it comes to creative new ways to tap its customers' wallets, Intuit is an innovator with few, if any, peers.

Got a complaint about how a vendor is treating you? Write to Ed Foster, InfoWorld's reader advocate, at

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