Seeing is Not Believing Part 17

Call in the Next Five Minutes

Who can resist a special deal? When people are offered things for a deep discount or possibly free, they rush to buy. Perhaps it is human nature, perhaps greed.

We knew a person who used to look for such sales and went far out of her way to get them. If a place offered something with a rebate that saved a dollar or two, she would buy it, even if it meant spending an extra $5 on gas and tolls and take an hour round trip. A few years ago, when she was visiting and saw we had something that was not working properly, she offered to give us one from her stock of more than a dozen that she had gotten for free.

During a visit to her house we noticed a bag among her garbage containing quite a few food items in closed packages. Thinking she had placed them there by mistake, we asked whether they were food pantry donations. She stated they were all items she had bought at a discount but were now out of date. She may have saved half price on them, but threw half out.

Companies take advantage of this trait to get us to buy things that we really don’t need, and may not even want. In print ads they are called “loss-leaders,” an item the company sells at cost or even at a small loss, to get you into the store. Milk used to be a common item that headlined advertisements. Buy your milk for half what it sells for elsewhere and while you’re in the store you may get cigarettes, snacks, and other high profit items. Now you see movie DVDs used the same way.

Restaurants use soda as a loss-leader. You may think you are getting a great deal when you get a free fountain soda, or even a 12-ounce can, but the cost to the store is negligible. Consider that supermarkets make a profit when they sell 12-packs of soda for $2. Thus a can of soda can not cost them much more than eight cents each (and possibly a 5-cent deposit). If they can get you to buy a $5 sandwich (which is $4.50 profit) and throw in a can of soda for free, who wins?

Television advertisements give away “free” items frequently. Purchase the acne cure (cure?) for $20 and get six items that other companies could not sell because no one really wanted them. Remember the extra shipping and handling charges we mentioned in last week’s blog?

Cruise ships use the same technique. Most of them over-inflate the prices so they can offer $200 off each room (not each person) and $100 room credits that must be spent on their amazingly high prices. Free water, coffee, tea, and ice tea, but soda, which costs them less than coffee, is $2.00 a glass or all-you-can-drink for $40 a week. Consider that – you need to drink 20 glasses of soda in seven days to break even. Twenty 12-ounce cans at the supermarket would cost you under $4.

Taking a cruise means more than being on a ship. At each port you get a chance to visit significant destinations such as historic sites, scenic locations, wineries, or other highly publicized must-see tourist traps. If you take the cruise ship’s planned tour you are guaranteed to get back before the ship leaves port, and you will also pay twice or more than if you take a similar tour purchased locally.

We’ve taken six cruises in the last dozen years and have only taken two tours: a penguin rookery and a swim tour in the South Pacific. They were wonderful, and well worth the cost. But we balk at spending $300 a person for a one hour hard seat no-shocks bus ride to some obscure location, ten minutes touring the place, a free 3 ounce glass of grape juice, and another hour back.

In one of our previous blogs we discussed high-pressure sales (Part 7, September 13, 2008). This is where you are told you can get a substantial discount if you purchase NOW. The offer will never be available again. Radio and television ads use the same technique, but with a twist. Purchase within five minutes and you get a discount, or a free item, or free shipping…. The implication is that if you wait six minutes you will not get the special offer. Twenty minutes later you hear the same ad, possibly on a different channel, again giving you just five minutes to call in. And tomorrow it’s on again, and next week, and next month…

NOTE: There is only one more article in this series. Started on December 22 we begin a new series entitled "Consumer Safety and Awareness"