A couple of merchandising practices have grabbed our attention lately and we imagine you might have had a passing thought or two about this kind of thing, too.
It’s another sign that our high school graduation speakers were correct: it’s a cruel world out there.
We have several in-store credit accounts that we always pay off each month when we use them. We’d pay cash but the lure of “points” that we can use to save on something else cannot be ignored.
We used one of our in-store credit cards to buy $1,740 worth of things recently. Our credit card statement told us that our annual interest rate is a tick under thirty percent.
The minimum payment is $29. The statement told us that if we made the minimum payment, our new appliance would be paid off in just FOURTEEN YEARS. And the total we would have paid for our $1,740 appliance would be a dollar short of $7,000.
However, if we paid $74 a month, the new appliance would be ours free and clear in just three years and we would have saved $4,300 dollars and change. And the chances would be much better that the appliance would still be working in three, not fourteen years.
All of this assumes we didn’t buy anything else along the way with this store’s credit card.
At least they’re honest about all of this. But they are leaning pretty hard on people to pay off the credit card promptly.
Maybe we could go back to college, fold this expense into a student loan, and wait for the President to forgive it.
There’s a second merchandising practice that is less direct.
A certain kind of refund.
We just can’t accept the idea that a store that says you will get X% rebate on your purchases couldn’t be more fair to their customers.
To claim your rebate, you have to go to the time and effort to mail in your receipt and after a time you get back some kind of a certificate that is not a refund of X% of the purchase price you just paid; it’s a few dollars off of the price you are charged the next thing you buy at that store—if you remember to take your certificate to the store with you.
We wonder what percentage of these rebates are ever filed with the store and how much revenue the store keeps because nobody ever turns in their certificates.
Next: Do the stores ever pay interest on the customers’ funds that they are holding onto until the certificate is redeemed? If I inherited a certificate issued fifteen years ago, is it still only worth $1.50 or have I been getting, say, 30% interest each year for grandma’s rebate certificate?
Why not?
We have long thought that if the customer is given the impression that they can save X% on a purchase that the cash register price should be X% less than the shelf-posted price. In our computerized business world it should not be difficult to hit a cash-register key to signify an item has been purchased at the discounted price so the store’s bookkeeping can keep track of such things.
It just seems more honest to have rebates made by the store at the point of purchase and not play games such as this with customers.
Maybe someday the legislature will pass a law saying all discounts and rebates will be recognized at the cash register at the time of purchase. That’s a matter of basic honesty in our book.
Yes, yes, yes, we know rebates are not the same as discounts. But, really, that’s just wordplay. And rebates that apply only to future purchases aren’t really discounts. Close. Kind of like a deer is like a moose, perhaps. Both have horns and four legs.
Maybe we need a law (always the simplest solution) that says any rebates will be made at the cash register upon purchase of the item. If the item is worth the money, the customer will return to do more business. Customers don’t need carrots on sticks if the product is good and the price is reasonable to begin with.
Capitalism. Ain’t it Wonderful?
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