In January, we were the first to call national attention to TurboTax’s nasty and inconspicuous ploy of stripping its flagship desktop income tax preparation software of key tax forms, thus forcing long-time users to upgrade to significantly more expensive versions. (See series of Mouse Print* stories.) Customers were livid and nearly 3000 of them posted one-star reviews on Amazon.
Major media picked up on the story, and after three weeks of a public pummeling, Intuit, the maker of TurboTax, finally relented (after some half-hearted attempts to satisfy customers) and offered free upgrades to everyone.
Then came the revelation that crooks were claiming income tax refunds via TurboTax’s online software before their rightful owners could. Some states temporarily stopped accepting TurboTax returns. The FBI, Congress, and the FTC all launched investigations. And Intuit finally strengthened verification of identities on its website. This dual onslaught of negative press spanned most of January and February.
One would think with the crushing and sustained negative publicity the company received over this period in the height of tax season that their sales would surely plummet. After all, consumers were mad as hell about the costly upgrades being forced on them, and worried as hell that TurboTax online was facilitating theft of their tax refunds.
According to Streetinsider.com, however, TurboTax desktop sales dropped only 6% or about 300,000 units, but online sales surged by two and a half million additional tax returns.
It is unfathomable to MrConsumer that millions felt more comfortable with TurboTax online this year than last, and that only relatively few abandoned the company’s desktop product. Wasn’t anyone paying attention except the two people who sued Intuit last week? Are all the alternatives just not up to the task? Or were those extra 2.5 million returns all filed by crooks?