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The shady economics of ‘buy one, get one free’ deals

thehustle.co

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Re: The shady economics of ‘buy one, get one free’ deals

#11

Post by ocfnash »

I quite enjoy mentally parsing these "offers" in logically equivalent ways. E.g., "buy one get one free" as "only sold in units of two" or even "each purchase of one requires compulsory purchase of a second".

As a child I remember considering the difference between "extra free" and "free" which I used to see on cereal boxes. Sometimes the box claimed "10% free!" but other sneakier boxes would claim "10% extra free!". The latter allows the marketer to quote the same nominal figure for a smaller absolute quantity.

Re: The shady economics of ‘buy one, get one free’ deals

#12

Post by lgbr »

ChrisSD wrote: post #4

> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.

Furthermore, if you want to return the item, you're entitled to a full refund, rather than being forced to pay for shipping for an item you didn't want.

Re: The shady economics of ‘buy one, get one free’ deals

#13

Post by consp »

JeanMarcS wrote: post #8
consp wrote: post #6

Fortunately some of this (bloating the price just before a sale to cover the cost, note: e.g. day before) is illegal where I live. Though it doesn't stop shops from trying. It does give the customer some extra power. If for instance the shop fails to sell all stock and dumps it afterwards you can try to claim the difference as this falls under deceptive practices. The buy one get two variant is fine as long as there…

Same in France. So when sales time arrives, you can see some items prices rising up a week before (which is, de facto, legal as long as you do it in advance)

True in some forms (in the Netherlands) but if you only sell it for a day for the increased price you could argue it is deceptive (Mediamarkt does this usually for a week before the sales which is apparently enough). What they used to do, raise the price on the day of the sale, is fortunately no longer allowed. The other trick being the use of the advised selling price (which is always way more than the actual value of the product) and go from there.

What I usually see these days is that products get offered on sale which have not been sold before so there is no way of knowing if they offered it before for less. Though internet helps if you are in a shop and it sounds dodgy at best.

Re: The shady economics of ‘buy one, get one free’ deals

#14

Post by simonh »

User23 wrote: post #5

My mother always said "50% off what?" Obviously when the merchant sets the nominal "retail" price to whatever they want, they can set the discount to whatever they want too and maintain their profit margin. This is basic algebra solving for one variable given a desired "discount". It's amazing how effective it is though.

I'm only (vaguely) familiar with the rules in the UK, but they include tests to ensure the 'was' price was actually a genuine usual selling price. This includes tests that the 'full' price must have been in place for longer than the promotional period, that it must have been recent and that significant sales were made at that price. Buy one get one free also has to mean you get two equivalent or similar products. Compliance is also monitored and enforced. I'm not claiming it's perfect, but by and large over here you can have reasonable confidence these promotions are usually valid.

Conversely my wife is Chinese. Over there 'buy one get one free' usually means something like buy one dress, get one flimsy, non colour-matching belt free.

Re: The shady economics of ‘buy one, get one free’ deals

#15

Post by glastra »

dalai wrote: post #9
ChrisSD wrote: post #4

> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.

On the other hand, if you want to buy two of them they cost $20 + $3 S&H or $26 with free shipping.

S&H is not always fixed-rate. In fact, "handling" two items should cost more. Shipping more weight should also cost more.

Re: The shady economics of ‘buy one, get one free’ deals

#16

Post by adriveatrain »

ChrisSD wrote: post #4

> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.

It does undermine the value logistics / delivery companies provide to the customers.

An industry that works on 3% margins already.

Re: The shady economics of ‘buy one, get one free’ deals

#17

Post by outime »

consp wrote: post #6

Fortunately some of this (bloating the price just before a sale to cover the cost, note: e.g. day before) is illegal where I live. Though it doesn't stop shops from trying. It does give the customer some extra power. If for instance the shop fails to sell all stock and dumps it afterwards you can try to claim the difference as this falls under deceptive practices. The buy one get two variant is fine as long as there…

It also happens in online marketplaces like Amazon but luckily there are tools to track price changes like https://camelcamelcamel.com/ (disclaimer: not affiliated at all, just a happy user). Wish there were more tools like that but for retail.

Re: The shady economics of ‘buy one, get one free’ deals

#18

Post by theli0nheart »

dalai wrote: post #9
ChrisSD wrote: post #4

> A coffee mug that usually sells for $10 + $3 S&H will go for $13, with FREE shipping. I actually prefer this. It's much better than shops that activity try to hide shipping costs until the last moment. Also it makes comparing prices quicker.

On the other hand, if you want to buy two of them they cost $20 + $3 S&H or $26 with free shipping.

Why is this surprising? Undesirable, sure, but shipping additional things costs additional money.

Re: The shady economics of ‘buy one, get one free’ deals

#19

Post by elcomet »

glastra wrote: post #15
dalai wrote: post #9

Earlier quoted context omitted.

On the other hand, if you want to buy two of them they cost $20 + $3 S&H or $26 with free shipping.

S&H is not always fixed-rate. In fact, "handling" two items should cost more. Shipping more weight should also cost more.

More than one shipping cost, yes, but it should be less than twice the shipping cost. Otherwise you could just order the items separately.

Re: The shady economics of ‘buy one, get one free’ deals

#20

Post by Shivetya »

telesilla wrote: post #2

My local supermarket does this all the time to my great annoyance, I never thought about the mathematics of why they don't just discount the item. At least it's better than the kind of deals that abuses people's misundertandings of mathematics entirely, such as https://www.telegraph.co.uk/finance/personalfinance/money-sa...

Here in the Southeast the grocery chain Publix is pretty much the BOGO chain, as in you buy stuff that is BOGO and take care otherwise. Their prices are standard fare for a chain grocery and the standard price of the item falls in line with other chains. Now for the most part any serious saver would BOGO and then hit up Wal Mart or Aldi to finish out their savings.

One interesting note is that in general you don't have to buy two items as part of a BOGO, you can buy one at half price. Now this is not true as some manufacturers, namely Coca Cola, require the purchase to be made as described. Meaning if its buy two get one you must take all three. They even get silly with Publix in that there will be buy two get two with Coke products that, you guessed it, you have to have four of the product to get it at the price of two.

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