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Are Free Wifi Hotspots Killing Business?

Updated on August 16, 2010

All across America, businesses everywhere are offering the convenient service of free wifi. Wireless Internet access which used to be considered a luxury is now becoming a standard complimentary service offered with business. Many businesses posts "free wifi hotspot" signs all over their establishments proudly showing their customers that they are hip to this new trend. While other business owners catch up to this new standard of attracting customers, some business owners disagree. They are actually claiming that free wifi is hurting their business. Can free wifi hurt a business? As I think about it, this claim could hold water in some cases. Let's look at the advantages and disadvantages of offering free wifi at a business establishment.

What's Wifi?

What is wifi? Wifi or officially, "Wi-Fi" is a trademark of the Wi-Fi Alliance which promote wireless LAN. Wifi is the universal standard for wireless LAN or "Local Area Network." Wifi is often referred to as wireless Internet or a wireless network. A place where you can pick up wifi is called a "Wifi Hotspot." This wireless standard also have different performance classes. Wifi A, B, G, and N are the current classes. Wireless n being the latest while wifi g being the most popular. Each class has a performance cap. Wifi G being acceptable in most applications while wifi n being much faster and having more range. Most people know of wifi through their mobile devices. They turn on their netbooks, laptops, etc and connect to a wireless network. They are either automatically accepted or there is a key/password that must be input in order to connect.

When we go to a coffee shop, isn't it convenient that we can pull out our laptops and get some work done as we enjoy a nice cup of java? Why yes it is! Isn't it great? I wish every business have wifi. What a great way to attract customers. Not only do I enjoy a good cup of coffee but I also get perks for being a good patron? That's a sweet deal.

Some businesses don't see it that way. Some coffee shops complain that customers buy a single cup of coffee and use it as a ticket to stay and use wifi for hours. Across the country, shops are complaining that seats are getting filled and their income is dwindling because they can't seat any more people. This claim does hold water. If I was in the shoes of these business owners, I would be upset too. I would want my business to make as much money as possible. I am selling coffee, not wifi. Wifi is a luxury. It's an extra perk for my customers. I wouldn't want a bunch of free loaders clogging up my business.


Is that what it comes down to? Free loading wifi? Some people say, "Yes." People are cheap. Instead of going home to do their work, they stop by a wifi hotspot, set up an office, and stay for hours. Is buying a cup of coffee a ticket to stay and leech wifi for hours? When do we draw the line between enjoying a customer perk and loitering?

Coffee shops aren't the only places that offer free wifi. Popular fast food chain McDonald's is making a bold claim that nearly all their locations have wifi. I've personally went to a few of my local McDonald's in a clutch and their claims do not measure up. Is this false advertisement? Are companies using free wifi to draw in customer but don't deliver because it is a perk? To me this sounds like a scam. The old bait and switch. Bait the customers in with cool offers and pull on the string the moment the customer reaches the prize. One could say leeching wifi is wrong but is luring people into an establishment under false promises wrong too?

While some businesses cut off wifi to rid themselves of "loiterers", it may still be a good idea to keep that router on. Some people, including myself, believe that wireless hotspots are indeed what their name suggests. Hotspots. People are attracted to these areas. People rely on their Internet access. Like it or not, free wifi has been adopted as a new standard in the eyes of a consumer. Just like pagers and cell phones, wifi is what consumers want and if a business won't supply it, there is always another business down the street that will. Wifi has also become somewhat of a "seal of approval." This wifi badge tells a customer that this place of business is aware of the needs of a modern consumer. If you don't offer free wifi, your business is just not with it.

There are exceptions to free wifi. I don't see a fancy restaurant offering free wifi just because of the environment. You must be sensitive to your consumer demographic. Do you want your customers to hang out? Hanging out at a business can create buzz and gives it value that is hard to measure. Hanging out can also increase loitering but that comes with the territory. It may not be wise to offer free wifi and then disconnect the service on your patrons. This might build resentment to your business. If my local mechanics shop offer free wifi, then that might say something if you disconnect the service on your customers.

Etiquettes Of Wifi

There is an unspoken rule when it comes to free wifi. Just like all things in life, nothing is free. Sometimes, it may be a good idea to adopt some etiquettes and manners. What I mean by manners is humbling yourself. Imagine yourself as the business owner. You need to make a living. So next time you are enjoying free wifi, take a minute to buy from the shop. It's up to you how much you want to spend but it does seem rude to buy a single cup of coffee while you set up an office for 3 hours of work. Another thing to consider is if people are waiting to be seated. If you are the only one in the shop, I can't see the harm in getting comfortable. After all, you are a customer until you leave the door. Just use your common sense. Showing some manners is a good idea if you are a frequent customer.

Is free wifi killing businesses? While it can hurt an establishment, I don't believe adding free wifi is the culprit. People need to realize that this global economy is still bad and blaming their losses on free wifi seems like a cop out. If anything, free wifi helps a business. It makes the area desirable and no matter how cheap some people can be, you can't really stay at a place too long without spending some money. I hope you enjoyed my article. Thanks for reading!


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    • SpaceShanty profile image

      SpaceShanty 4 years ago from United Kingdom

      I have noticed a new trend called 'social WiFi' which means users must login with their Facebook account to use the free WiFi, this way the coffee shop or business gets their details so they can send them info to get them to come back or get an extra like on their FB page. I'm not a fan of this idea as you are giving away to much info and i go out to socialise, I spend enough time online at home!

    • RTalloni profile image

      RTalloni 4 years ago from the short journey

      Interesting to think these pros and cons through. Finding the balance point on the fine line of providing wifi for customers and dealing with free loaders obviously requires some knowledge of true customers and skill with people in general. Free wifi for customers is very different than simply advertising free wifi.

    • Set's All Set profile image

      Set's All Set 5 years ago from New England

      thanks for sharing your experience sally! I can imagine all the stuff you go through and all the headaches but is there a way for you to measure success? As in, has providing wifi at your business resulted in an increase in traffic or did it merely put you on par with your competition?

    • profile image

      Sally 5 years ago

      They are called splash pages. Any IT person can set this up, but that's just another hidden cost that comes with the wifi. I'm a shop owner quickly learning the anxieties of offering wifi. I bought a router, but then I quickly received emails from my Internet provider pointing out illegal downloading that was occurring on "my" plan and I was warned that a sufficient fine would be thrown my way if I didn't correct "my" behavior. Then I had to pay an IT pro to come in and "throttle" my router to control the strength of the connectivity for users as well as the signal strength for the moochers living in the apartments up above.

      All in all, Wifi is a constant headache for me and I wish that I didn't "have" to provide it. I too have constant loiterers and I have been put in the daily position of confronting customers about purchasing items in exchange for their hours of connectivity.

    • Set's All Set profile image

      Set's All Set 6 years ago from New England

      Neil, yes that is possible. Borders(before they went under) used to do this. You have to click their terms of agreement before you can use their wifi. I believe Barnes & Noble does this too though I am not 100% sure.

      I, personally, do not know how to do this but I'm sure any competent network administrator can set this up professionally.

    • profile image

      Neill 6 years ago

      Is there a way to have your establishments website pop up when someone logs on? This would be a great way to advertise to the users of the free wifi when they first log on, with deals or ways to support us.

    • Learn Things Web profile image

      Learn Things Web 6 years ago from California

      I have a small business with limited seating. I have thought about offering wifi but have been concerned about the very point you bring up about customers taking up seats just for the free connection.

    • Set's All Set profile image

      Set's All Set 7 years ago from New England

      You are definitely right on Starbucks! It can get pretty hectic in there. When it isn't busy, I do enjoy their big cozy chairs.

      I do see people setting up their offices there. Kind of rude seeing as they only buy 1 cup and stay for hours. I agree, quality traffic is great for business. Thank you for your comment!

    • MKayo profile image

      MKayo 7 years ago from Texas

      I agree. Folks who are leeching free wifi need to patronize the business, if for nothing else, simple courtesy. I have tried staying at a Starbucks and working but there are just way too many distractions. When I do stay for a time, I buy something. I also agree with the earlier comment that free wifi is a loss leader to draw traffic. The trick, like internet marketing, is to draw qualified traffic that will make a purchase.

    • Set's All Set profile image

      Set's All Set 7 years ago from New England

      this "cock-muncher" was just correcting a mistake often made by uneducated tourists. I understand that people are just lazy and don't bother to learn about other cultures before they write. Even more so, they wiki definitions to counter arguments in which that very article proves them wrong!

      I apologize for posting my comment on your hub. I didn't think a man like you would be so sensitive that he would resort to copy pasting wiki's and childish name calling. I suppose being a man is a title that must be earned rather than a position to be filled. Somewhat akin to seducing a woman with charm, good looks, and wit rather than with money. :) Good day, sir.

    • Mrvoodoo profile image

      Mrvoodoo 7 years ago from ?

      Good choice. And you're right, I'm sure nobody gives a shit. It was you who wanted to start acting like a cock-muncher. I'm guessing that came with ease for you. :)

    • Set's All Set profile image

      Set's All Set 7 years ago from New England

      I choose to use "to" but thanks for picking that up. My spell check didn't pick up on that. I can imagine all of the people going crazy at my grammar mistake. Especially the Thais, right? :)

    • Mrvoodoo profile image

      Mrvoodoo 7 years ago from ?

      'While other business owners catch up the this new standard of attracting customers.'

      or perhaps 'with this' for those not grammatically challenged. It's fun to nitpick, right? ;)

    • Set's All Set profile image

      Set's All Set 7 years ago from New England

      I completely agree with you. Sometimes, you have to use money to make money and if wifi is what's bringing in customers then businesses need to offer free wifi.

      Selling products at a loss is can also help a business control market shares. If wifi is hurting their business, they still may find it beneficial in the long run to offer it to keep the customers they have.

      Thanks for the comment Captain W!

    • Captain W profile image

      Captain W 7 years ago from California

      Great topic. I believe Free Wifi is a modern example of "lost leader". Meaning, a business sells a product at nearly cost or even at a loss in order to generate more incoming traffic.

    • Set's All Set profile image

      Set's All Set 7 years ago from New England

      definitely true ns1209!

      We measure cities by their wifi coverage. If a city has weak wifi coverage, to me, I think, "This city is not developed!"

      Thanks for the comment.

    • ns1209 profile image

      ns1209 7 years ago from UK - England

      Really interesting hub. Nearly every coffee shop/cafe in busy cities now seems to have WiFi. It has just become an expectation now!