Social media puts the screws on TurboTax

I've used TurboTax or its predecessor, Macintax, to do my income taxes since 1994. Except for the introduction of electronic filing, TurboTax hasn't fundamentally changed over 20 years. I have continued to use it because it's familiar, it's convenient, it's unfailingly accurate, and the price has been fair. In recent years there have been three versions, priced differently: Deluxe, Premier, and Home & Business. In the past, all my needs were met by the baseline Deluxe version.

But the maker of Turbotax, a company called Intuit, decided to remove functionality from the Deluxe version that millions of users need — specifically, IRS Form 1040 Schedules C and D. Schedule D would be available in the Premier version. Schedule C, beyond a primitive extent, would be available only in the Home & Business version. The effect was to force users to buy a more expensive version. Worse, Intuit didn't tell anyone they were making the change. It was only when users began installing the software last month that word got out.

And there was a big stink, propelled rapidly by social media — without which Intuit would have gotten away with it, I believe. Traditional media picked up the story from social media. Score one for Twitter, Facebook, forums and message boards, etc.

Forbes explains what happened next. After several incompetent attempts to mitigate the damage, Intuit reversed the decision and offered this well-done if carefully scripted video from the CEO. Looks like they engaged a consultant on how to recover from retail disasters.

The controversy appears to be over, and consumers won. But will Intuit pull another trick in a year or two? That's the kind of mistrust that is not easily dispelled.