‘Politeness premium’ costing Irish consumers €600m each year, research suggests

Irish consumers lose an average of €150 each year as a result of a “politeness premium” which sees them overpay on shared bills and fail to collect personal debts, according to research published by AIB on Monday morning. The study suggests that fewer than one in 20 Irish adults will always ask for money they are owed back, with as many as 90 per cent saying they would let as much as €50 slide rather than have a conversation they consider difficult.All told, about €600 million gets lost to social awkwardness every year, AIB said.And as if to prove the Shakespearean wisdom about never being either a borrower or a lender, the unspoken debt has “soured a relationship” among almost 50 per cent of those surveyed. READ MOREThe research also highlights how consumers handle peer-to-peer debts varies dramatically depending on county, age and gender.The geographical divide in financial assertiveness indicates that people from Galway have Ireland’s highest ‘threshold of asking’ and willingly absorb up to €32.50 in unpaid amounts before speaking up.By contrast, people living in Wexford draw the line much earlier by refusing to let more than €12.50 slide.Adults from Limerick are the most likely to insist on itemising group bills line by line, while those living in Dublin prefer splitting bills evenly among the group.When asked why they hesitate to chase small debts, Irish adults often frame their silence as kindness and say things such as “they’d do the same for me”, “it evens out over time”, or “I’d rather be generous than keep score”. [ Ireland’s new personal investment accounts: How does it work if I have €1 or €12,000 to put in?Opens in new window ]However, behavioural data reveals the underlying tension when payments arise, with 40 per cent saying owed money left unspoken has soured how they feel about a relationship and two thirds admitting to a level of discomfort when someone suggests itemising a group bill. Nearly half said they regularly overpay on shared bills or rounds to keep the peace, with 25- to 34-year-olds feeling the greatest pressure and 74 per cent overpaying regularly, according to the survey of 1,009 adults conducted by Bounce Insights on behalf of AIB and Ogilvy.Close friends and colleagues were deemed to be the hardest groups to ask for money back from, with women saying they found it particularly difficult to reclaim money from close friends.“People rarely describe their silence around money as awkwardness,” said Dan Bennett, global head of behavioural science with Ogilvy Consulting. “They describe it as generosity. But the cost of that politeness is real, showing up both in people’s bank accounts and in their relationships. In Ireland, the fear of appearing impolite leads many of us to pay a ‘politeness premium’.” “The behavioural science research that AIB’s new Everyday Banking campaign is rooted in highlights how social dynamics impact our daily finances, create social friction and can even cost people money,” said the bank’s chief customer officer Orlaith Ryan.