BillShrink exec responds to problems with its money-saving service

Via e-mail, BillShrink.com co-founder and head of product development Samir Kothari answered my questions about apparent shortcomings I encountered while reviewing the service, which aims to help you find the best credit card or cellphone plan.

I've presented Kothari's unedited response after my questions. Also see my review of the competing My Validas service.

1) BillShrink appears only to harvest my most recent month's bill and analyze that. Is that correct? Is there a reason (technical or business) why it couldn't harvest previous bills, which are viewable to me online?

You are correct in noting that our current system is designed to analyze only the most recent bill. There are no inherent limitations on our system, and so we do have the ability to modify it so that it reviews multiple bills.

The biggest downside to expanding the number of bills reviewed is that the total time required for the bill harvesting scales proportionally, and our initial user feedback suggested a preference for the faster response time associated with a single bill.

Our plan is to extend the functionality on the site to let the user specify the number of bills to review. In the meantime, our monitoring service can automatically check for the availability of a new monthly bill on your account and update the recommendations appropriately.

2) BillShrink suggested several plans for my BlackBerry that it claimed could save me up to $400 a year. However, none of them included data. I think it was fooled b/c my plan is a combo voice/data plan for which the latter is unlimited. Thus, the 7 MB of data usage I had was 'free', even though clearly it needs to be paid somehow. Choosing Blackberry phones only didn't fix this. Is this an issue with how my provider exports data (differently than other phone providers) or an issue with Billshrink's ability to mine data in general?

Sorry to hear that you’re running into this issue. The way that our system works is that reviews the detailed usage line-items (i.e. each call record, each text message, each data session, etc) from your bill to create a bottoms-up, highly-detailed representation of your usage.

That enables us to most accurately compute the effective cost of that body of usage across all the different carriers/plans/combinations on the market. In your case, it sounds like your bill is probably not displaying the data usage details which we rely on for our usage profile generation, and as such, we will need to enhance our system to check for data usage in a supplemental way.

In summary, the issue stems from variance in how the carriers do billing. And this variance occurs within a single carrier as well. For example, we’ve tested several other accounts from the same carrier that use data and ensured that our system works correctly, but due to multiple billing system/current plan combinations, we have not yet been able to achieve 100% coverage of their bill variants.

So your feedback in this regard is really helpful and we’ll work on improving it.

3) Any plans to let users directly upload their credit card bills, rather than estimate their spending?

Credit card bill imports is a feature that we consider adding on an ongoing basis. There are no immediate plans to add it as our user feedback indicates that our current input paradigm is sufficiently detailed to provide accurate recommendations.

For the audience who carry a balance on their cards, there is limited value in having the line-item charge detail because it is the overall card parameters (rates, fees, terms and conditions) that drive its total cost of ownership.

It might be nice to have some of the category spending detail on the audience looking to optimize their rewards value and we’re considering some options there such as importing year-end summary statements.

4) Any plans to add ability to exclude certain airlines' milage programs? BillShrink suggested I go for Chase Freedom Plus which would give me an additional $2,773 over 3 years of value over my current card. The problem is that Chase Freedom redeems only with UA and British Airways, neither of which I fly on.

Yes. Enhanced consideration of airline/hotel affinities has been a commonly requested feature from users and we’re working on it. So you would be able to specify/remove certain airline/hotels from consideration and have the recommendations update accordingly.

5) Also, I thought the BillShrink algorithm made overly aggressive assumptions. For instance, I indicated that restaurants are my top spending choice. Through my card's rewards dining program, I get 5 miles per dollar spent at participating restaurants. BillShrink suggested I go for the platinum version of my existing card to get an additional $1,400 in value. When I removed restaurants as one of my top 3 categories, that platinum version was only worth an additional $350. That seems to imply it assumed significant spending at participating restaurants. Yet, I could only find 72 participating restaurants in Seattle area, none of which I had ever eaten before.

Thanks, this is helpful feedback that we can use to tune our assumptions. In the meantime, I can provide some background on the assumptions that are being made by the algorithm.

To begin, we take the monthly spending figure that you provided and allocate that across the 17 spend categories in our system (i.e. airfare, restaurants, hotels, etc).We use the inputs you provide for your top 3 spend categories to increase the allocations those categories receive. So for example, if you specify restaurants, gasoline, and groceries, those three categories each get a bigger portion of the total monthly spend. The category level allocations are important, of course, since cards often have reward earning rules that vary by category.

In cases where the reward earning rule is limited to a specific brand (i.e. only when you buy airfare on United Airlines) or limited to “participating merchants” (i.e. such as your example with Alaska rewards dining program providing a bonus at participating restaurants), we make an assumption that 75% of that particular category’s spend will meet the bonus condition.

Naturally, this is not going to be perfect in all cases, but the concept was that if it was possible to earn bonus rewards by utilizing specific merchants, the user would try to pick qualifying merchants whenever possible, but would probably not be able to always accomplish that.

We may consider a power-user feature that allows the user to control some of these assumptions manually which probably would be helpful for you.

6) I had to re-upload my cellphone data several times, including twice in the same online session, and also re-enter my credit card data, even though I created an account which should store that info, right? I'm running Firefox 3.0 on a Windows PC, by the way.

Yes, the system is designed to retain all of your input once you’ve created an account. I’m also using FF3 on a PC and have not been able to reproduce that error, but I will definitely continue to investigate and I’m sorry that you ran into the issue.

We just launched a major update last week and probably have a few lingering issues that sneaked past our QA team.