If your internet bill suddenly jumps $12, your airline miles stop going as far, or your streaming subscription quietly tacks on 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 boost revenue. You stay put, prices creep up, and loyalty ends up costing you.
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But the good news is that these increases are often negotiable, as long as you talk to the right person. Take it from a professional: Investor and “Shark Tank” star Kevin O’Leary says he combats creeping prices by asking to speak with one specific person.
Why Kevin O’Leary says the retention officer is your secret weapon
When a price hike shows up on your bill, who you talk to matters.
“I always call on a bill and say, ‘Let me speak to your retention officer.’ Avoid dealing with the sales rep, because only the retention officer can cut the deal,” he said (1).
A retention officer (sometimes called a customer retention specialist) has one job: to stop you from canceling. They’re usually the only person authorized to:
- Extend or reinstate promotional rates
- Waive fees or one-time charges
- Offer loyalty perks
- Price-match a competitor
Financial software firm Vena Solutions reports that when customers do escalate calls, retention teams can successfully keep between 67% to 84% of accounts in various industries by offering targeted incentives. (2)
And companies fight hard to keep you. 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 company revenue often comes from loyal customers, so many businesses offer perks to retain their following (4).
For example, it costs a company money to pay an employee to come to your home and install your Internet service, as well as paying for the equipment used to do so. An existing customer hands over money every month without costing the company anything extra that a new customer would.
How the “loyalty penalty” quietly drains your wallet
Companies have learned that most people simply won’t switch. And because of that, loyalty programs and long-term customer relationships can become traps that mask steadily rising costs.
Here’s how pricing creeps up across common services:
- Streaming services: Major players like Netflix, Disney+ and HBO Max raised prices by about 20% in 2024 (5).
- Internet and cable plans: U.S. households now spend an average of $1,063 a year on internet and cable (6). These costs typically climb once promotional rates expire.
- Car insurance inflation: Car insurance rates peaked at 23% in 2024, which was driven by higher repair costs, pricier replacement parts and rising litigation expenses (7).
- Airline loyalty programs: Points used in these programs for loyalty perks have been devalued by an average of 36% since 2019. Even long-time frequent flyers find it harder to redeem rewards without paying extra fees (8).
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Loyalty programs are built to keep you from switching
Rewards programs, points systems, auto-renewals and “member-only” perks often create the illusion of savings while prices slowly climb. Here’s why these programs cost you more over time:
- Tier systems encourage overspending: Airlines and hotels design their tiers so you need to keep spending to maintain your status even if cheaper options exist elsewhere.
- Auto-renew pricing hides increases: Subscription services rely on the fact that most people never check their statements closely.
- Points and perks are quietly devalued: What used to cost 20,000 points may now cost 28,000, meaning you’re effectively paying more without realizing it.
- Competitors offer better prices, but only to new customers: Internet providers famously offer $49 plans to new customers while loyal customers may unknowingly pay $89.
In short: loyalty programs make switching emotionally expensive, even when it’s the financially smarter move.
How to negotiate a lower bill
You should come prepared when calling your provider. Here’s how to maximize your chances:
1. Do your homework
Start by researching current promotions available to new customers so you know what deals are on the table. You can also get quotes from competitors and reference them during negotiations.
2. Ask for your old rate
You can request your previous promotional price. Many companies would rather extend a discount than lose a customer.
3. Negotiate add-ons
If they won’t lower your bill, ask for perks like free months of service, waived upgrade fees or bonus loyalty points to offset costs.
Whether it’s your internet bill or your insurance premium, companies are banking on you to stay silent. But with a few minutes on the phone, you can push back against creeping costs. And even if your provider refuses to budge, you still have leverage: comparing rates at other companies, switching to a new-customer promotion or bundling services elsewhere can often save you far more than a single discount ever would.
The key is remembering that you’re never stuck, and there are always options to bring your bills back down.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Kevin O’Leary (1); Vena Solutions (2); Outbound Engine (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.