The offer is straightforward, which is one of the reasons TurboTax has taken the approach. Consumers can use the 1040EZ/A product “with zero hidden costs.” Of course, hidden costs would damage the company’s reputation even further, making the claim odd. In addition, the free product has $0 costs for federal taxes, $0 cost for state and $0 costs to file. TurboTax claims the state feature is a new addition. That only has utility for people who live in states that have income taxes.
ALSO READ: States With the Highest (and Lowest) Gas Taxes
One of the most important parts of the promotion is that it contrasts “free” to the prices charged by rivals H&R Block and TaxAct. These are the products that likely gained the most when TurboTax made that huge increase in the price of one of its most popular versions.
A look back at the catastrophe shows that TurboTax would risk so much revenue by offering the free version. The Los Angeles Times summed up the reason that TurboTax is in such great trouble:
The company announced Wednesday that it will roll back the changes it made in TurboTax this year that effectively made the program more expensive for many filers, and will cancel the changes for next year. This year’s users who have been forced to upgrade their TurboTax version to complete their taxes can now upgrade from within their program for free, rather than waiting until they file their returns and applying for a rebate. Intuit is communicating its decision by email to registered TurboTax buyers.
These reactions hit TurboTax owner Intuit Inc. (NASDAQ: INTU) like an anvil, as both the press and people on social media attacked the company for days. Intuit has decided to gamble that “free” will be a means to bring back customers. But “free” does not always offset a loss of trust. It only makes that company look desperate, which it is.
Top Gaining Stocks
Top Losing Stocks