WSJ Your Money Briefing - Companies Are Cracking Down on College Discounts for Non-Students

Episode Date: August 13, 2024

Clinging to your old college ID isn’t enough to guarantee a discount anymore. WSJ reporter Mengqi Sun joins host J.R. Whalen to discuss the high tech efforts used to restrict access to student discounts.   Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

How do stop losses work on Kraken? Let's say I have a birthday party on Wednesday night, but an important meeting Thursday morning. So sensible me pre-books a taxi for 10 p.m. with alerts. Voila! I won't be getting carried away and staying out till 2. That's Stop Loss Orders on Kraken, an easy way to plan ahead. Go to kraken.com and see what crypto can be. Non-investment advice. Crypto trading involves risk of loss. See kraken.com slash legal slash ca dash pru dash disclaimer for info on Come and see what crypto can be.

Here's your money briefing for Tuesday, August 13th. I'm JR Whalen for The Wall Street Journal. For people in school with a tight budget, getting a student discount can mean less money coming out of their pocket. But some still try to get the discount after they graduate, and companies are starting to crack down. They tap into more than 200,000 data sources, including university registers and other kinds of verification data, to verify if someone is actually a student or not. And for some times a company might require someone to submit, you know, using facial recognition or IP address to verify their identity.

We'll talk to Wall Street Journal reporter Munshi Sun about high-tech efforts to restrict student discounts to students after the break. AI may be the most important new computer technology ever, but AI needs a lot of processing speed and that gets expensive fast. Upgrade to the next generation of the cloud, Oracle Cloud Infrastructure or OCI. OCI is the single platform for your infrastructure, database, application development, and AI needs. Do more and spend less like Uber, 8x8, and Databricks Mosaic. Take a free test drive of OCI at oracle.com slash wall street oracle.com slash wall street

many companies are tightening the rules around who was eligible for a student discount Wall Street Journal reporter Munshi Sun joins me Munshi what are examples of student discounts that some popular services offer? So we've seen many streaming services such as Apple, Amazon, Prime, Spotify, offering student discounts. For example, the Apple, you can get educational pricing on their hardware, such as laptops and also discounts on AppleCare Plus. They also give students about, you know, $5.99 per month deal for their Apple Music and Apple TV Plus, which is about 70% off their usual prices

of the two services combined. We have also seen Amazon giving pretty much half the price to their students or younger people of their Amazon Prime service. Why do companies offer those discounts in the first place? Companies realize this is a great opportunity to start building a relationship with the customers who might be, you know, a lifelong relationship for them. The companies we talk to, they have stats showing that most of the streaming services

working with some verification company was able to retain more than 90% of their student customers even after they graduate from school and having to pay full price. But you're right that some students are trying to get discounts even after they graduate. How are they doing that? Like the old way, sometimes you just show a student ID that you maybe still have from college or sometimes you can just show them an email address. A lot of places, they'll just simply check, take a look at your certain ID

or the email you might have from a school. And then many other places might just operate on an honor system. For example, for Apple, if you're shopping for their educational pricing on their hardware, they will check some certain ID in the store, but they don't really verify online. Why are some companies cracking down on customers

trying to get the discount? The savings you get from all the student discounts combined can be huge. We calculate that you can maybe save up to hundreds of dollars a year. And obviously, it's very lucrative for people who are just trying to save some money from anywhere. And many people who are into their 20s, who might have graduated from college a few years ago, and for whatever reason, maybe it's student debt or inflation, they just hang on to the people who are into their 20s who might have graduated from college a few years ago and for whatever reason, maybe it's student debt or inflation, they're just hanging on to

the student ID looking to get some extra savings. Is there an age limit on eligibility for a student discount? Usually companies require some kind of enrollment in school such as college or grad school, but some companies like Amazon has extended the discount to just younger people for people who are under the age of 25. But this works sometimes even if the student ID or their email address has expired? Yes. So other people I talk to, their college ID,

don't really have expiration dates. And some people, they might still have access to their college email for a couple of years, even after sometimes, you know It's a long-term connection to the school, but it is getting harder to get around the system Yeah and you're right about some of the ways companies are now verifying that someone is actually a student when they try to purchase something and They get a little high-tech tell us about those so there are companies offer services for verification

Tell us about those. So there are companies that offer services for verification such as ShareID and UniDays. For ShareID, they tap into more than 200,000 data sources, including university registers and other kinds of verification data to verify if someone is actually a student or not. And for sometimes a company, a brand working with them might require someone to submit using facial recognition or IP address to verify their identity. Facial recognition is involved. Sometimes, it's not always required,

but it can be added on if a company wants to do it that way. So a student would sign up with ShearID with the intent of then going to stores or online services and hoping to get the discount? It's a little bit different for how different platforms verification works. For ShearID, they're more like a white glove service, which they're building to each different brand,

like companies they work with. For example, if you're signing up for Spotify student ID, you basically just kind of sign up in a typical way on Spotify's website, and then they will ask you to verify your student service. So ShareID said they work with more than 300 different brands for the verification, including Spotify, as well as the Wall Street Journal uses ShareID

to verify for student subscribers. You mentioned that there's some facial recognition involved, but what types of personal information would a student typically have to give to a verification service like ShearID? Typically, a student just needs to submit their date of birth, their school name, and sometimes their school email address when they sign up for the student plan. And if ShareID can identify their status based on this information, they might ask the students to submit a picture of their student ID, a transcript, or any kind of documents that might show that they're actually enrolled in school. But in terms of former students who are trying to game the system and get a student

discount, do the companies run the risk of losing a customer if they shut them out of getting the discount, even if they're no longer a student? Short answer is yes. I've talked to people who were Spotify student discount user who were able to get Hulu for free as part of the deal. They just simply don't watch TV or watch Hulu anymore because they don't have the access to the cheap subscription. So definitely for companies, they run the

risk of losing customers. But in other cases, I think they're hoping is these students who are customers from a really young age to their products are able to stay on after they graduate from college and able maybe to pay for full price subscriptions. That's WSJ reporter, Munchy Sun. And that's it for your money briefing. This episode was produced by me, JR Whalen, with deputy editor, Chris Zinsley. Thanks for listening.