What businesses drive you insane with indefensible or incoherent pricing policies?

In My Humble Opinion
1

I don’t mean “What business are too expensive” or “who’s overpriced?,” but rather “Whose prices or price structures just don’t make rational sense?”

There’s a chain of sandwich shops around the midwest called Potbelly - nothing to write home about, but they’re usually better than Subway in a pinch. But their “all sandwiches are the same price” pricing structure just drives me bonkers. For example, their “Wreck” - about a half pound of four or five different meats on a sub - is the same price as their Peanut Butter and Jelly, which is literally just jiffy peanut butter and welch’s jelly. To throw a THIRD specimen into the mix, their “pizza sub” - which is literally just marinara sauce, cheese, and mushrooms on a sub - is the same price as the aforementioned two. To add a little extra dash of illogic to the proceedings, it’s $.50 extra if you want to add pepperoni to the pizza sub (in other words, for it to actually be a pizza sub instead of a marinara sauce sub). Completely illogical pricing!

And then there’s I-tunes, but this one’s simple; the reason that a CD is $15 or so is 90% due to the cost of manufacturing an actual physical CD and getting it onto shelves in a store. When you remove all of that, the remaining digital content should really only cost about 1 or so for an *entire album*. It drives me insane that people buy into their .99 per song pricing structure; it’s like telling someone that you can buy a pack of gum for 1 or you can buy individual sticks of gum for .50 each, and watching them pony up the $.50 per individual stick. Smack!

2

This evening I went to a bar where they were having a two-for-one special. I wanted to buy another gentleman a drink, and he wanted a vodka cranberry, so I ordered a vodka cranberry and a coke.

It was explained to me that the two drinks had to be the same. Fine, I said, we’ll both have cokes.

It occurred to me that they just talked themselves out of the (higher) price of a vodka cranberry. Everywhere else I’ve had a twofer at has been happy to give you different items, charging you for the more expensive one.

3

How do you know this? Have you factored in the cost to Apple of writing the itunes software? Keeping the service maintained and paying for bandwidth and advertising?

4

Matt, that doesn’t make sense–but then, you’re not trying to tell us that it did. I wonder if the bartender or manager, after you changed your order to “two cokes,” went :smack: . After all, they lost the big markup they undoubtedly charge on vodka (and other boozy) drinks.

As for me, I’m always puzzled by small-medium-large drinks and prices. To state one of the stranger ones, my Friendly Neighbourhood Barman will happily sell me a draft beer, by the 14 oz glass, the 20 oz pint, or the 32 oz “schooner” mug (as we call it). But oddly enough, when the cost per ounce is figured out, the glass comes in at the best price. Those who drink schooners are cheating themselves when they should be getting some kind of economy of scale. What makes it really odd is that it was Friendly Neighbourhood Barman who figured it out and told me about this deal. Thanks, FNB!

5

I have a different iTunes grumble - classical albums being charged per ‘song’. Despite the fact that a piece of music might gasp have more than one movement! Like, maybe even several!! (79p for each of Bartok’s 44 duos, my arse.)

6

The point of iTunes pricing is that out of 10 tracks on an album people usually want one or two.

So they’re willing to pay $2 for two songs that they like instead of $15 for 2 songs that they like.

7

Jewelry. 200% mark-ups and then huge sales. :rolleyes:

8

I’m not getting the pricing at McDonalds lately.

A plain old cheeseburger actually costs more than a bacon cheeseburger or a double cheeseburger, and if you order two orders of small fries it is cheaper than ordering one. I don’t get that at all. Like, I could see if one order of fries was $1 and two was $1.40. But it’s actually two for $1 and one for $1.40. Why would they do that?

9

Most places you go…

~$1.40 for a 20oz bottle coke

…next shelf over…

~$0.99 cents for a 2 liter bottle of coke

10

A friend of mine on another message board had this recently…

Steak and a beer was A$10 on special, but it was a 250ml beer. She wanted a pint, so she thought she’d pay a dollar or two for the extra beer. Nope. The special was void, and she had to pay A$15 (or whatever it was for the steak at full price) and another fiver for the pint.

11

Posted before I remembered the Seinfeld / Margaret Cho Chinese restaurant episode that happened to me…

Me, my sister, my step-brother and his wife went to a restaurant in Sydney’s Chinatown. We are all rather large people and can eat. Boy, can we eat. So we sat down and looked at the menu. We decided to order a banquet, but the smallest one had a note saying “minimum five people”. We knew we could finish the thing, so we asked for it anyway.

But we got this ice maiden banquet-nazi waitress from hell.

“We’d like the banquet for five, please.”

“No! There are only four of you!”

“Yes, but we can finish it. We’re hungry.”

“No!” There are only four of you!"

“But we are happy to PAY for the banquet for five.”

“No!”

“But you get more money this way…”

“NO!!!”

And the thing is, we are none of us timid people, but she fucking cowed us, and I remember walking down the street afterwards with all of us saying, “how did we let her do that?”
Another one was when I first made the jump from dial-up to broadband, my girlfriend (who knows jack about computers) signed me up as a present, but she signed me up on a ridiculously small plan, and I blew the bandwidth out of the water after the first three days of the month. So I rang up the ISP…

“Good morning, Optus Internet…”

“Yeah hi. I’d like to upgrade to your mega fuck-off uber-expensive geek unlimited plan please.”

“Sure. What is your account number?”

“544568467865634865”

“Uh. Sorry sir. You can’t upgrade until the end of the billing period.”

“But that’s twenty-eight days away!”

“Yes. sorry, sir.”

“So I’m stuck on the equivalent of a 28k modem for weeks?”

“I’m afraid so, sir.”

“So, let me get this straight. I want a faster connection. You want my money. We should be able to make a deal right here and now, but you can’t take my money. What sort of business model is that?”

12

Yeah, because everyone knows the only expense that goes into making a CD is the price of the plastic disk. Those artists? They don’t need to eat; they should get day jobs to pay the rent. iTunes software? Well, that’s another thing that shouldn’t cost a thing. I mean, you get NOTHING with software, it’s just a bunch of bits on your hard drive. Why should you pay for that? :rolleyes:

13

That’s called an idiot tax. Similarly one of my grade school classmates found that at a certain restaurant, you could buy cheese fries for $3.00 or a regular order of fries for $1.00 and an ‘extra cheese’ for $0.50.

But often times I just don’t think the restaurant was looking at the current menu when figuring out the price for a new item.

14

Right, except the actual price breakdown on a popular music CD I’d expect to be about a $1 of materials, $1 of intellectual property and the rest marketing, distribution and margin driven up by demand. The demand has put both music CDs and iTunes outside of my zone of interest in price, so the companies do not have me as a consumer. I, as the individual consumer, have a right not to buy something because I think it’s overpriced, doesn’t mean anybody has to agree with me. As for iTunes, you’re paying for marketing. Remember, from the consumer point of view before all the crackdowns the original Napster was free and did the exact same thing, albeit illegally. It is reasonable to expect that Apple at least considered a peer-to-peer model and could’ve had comparable development and upkeep costs as the original ad-supported Napster. The CD doesn’t have to be pressed or shipped. You’re paying for intellectual property and marketing. The songs they sell are in most cases not products, the albums were products, the songs are fragments. You cannot buy a new car at retail and sell all the parts to make up your money. If you could actually SELL all the parts as new at their retail price you would probably even profit, but some things have a very limited demand.
As to the OP,

I once walked into a Chrysler dealership because I wanted a replacement driver side visor (you know the cloth and wire thing that shields you from the sun). I was asked if I wanted the visor arm as well. I said that I did not need one. I got quoted close to $200 for the one without the garage door opener. :eek: The arm was just a bit more extra :dubious: When I asked why it was this much, the gentleman at the parts counter indignantly replied “Well, I’m thinking it’s because somebody has to sew it, and they have to eat too, you know” :confused: I asked what it cost to duplicate my key, which was around $150 if I wanted the keyfob, about $100 the metal key itself (Note, it is not a chipped key). I decided not to ask if somebody had to sew that as well. In complete terror at this point, I asked for a quote on a replacement AC knob, expecting to get raped. In the end I walked off with just the AC knob, for $8.99. Now, neither the visor nor the AC knob are parts I could’ve gotten elsewhere (I learned to live without the visor). What the hell kind of price structure is that?
What the hell do they base their prices on?

15

That’s the convenience fee. Few people would want to lug a 2-liter around, but a 20 oz is nice and portable.

16

Mostly marketing. Almost zero margin. And getting worse. In their wisdom, record companies have responded to lower demand by increasing marketing. Distribution is pretty tiny. Artists get but a small cut.

But the record industry used to be sweet (and I think still is) for ridiculous marketing perks to artists and buyers.

And both the IP and the marketing - the big costs - remain in the iTunes model. What gets cut out is the cost of making the CD (pennies) and distribution (not much more). What gets added is the technology infrastructure - cheaper than production and distribution, but not free.

17

Actually, if you’re talking about retail distribution, it would be very expensive. Think about how many $/ sq ft it costs you to have the album on the shelf of your local Wal-mart. Definitely non-trivial.

If iTunes pricing was so unreasonable, no one would use it. Why would they when they have unlimited free access to the same item with a bit more effort? I didn’t think they would make any money off of it, Apple at the beginning didn’t either.

18

Name brand clothes. My jeans $20 bucks, Her jeans $60-$90 bucks. Ohh, but they are Polo. Polo must mean “sucker” in French or whatever.

19

Actually, I don’t see any issue with iTunes pricing. If you want an entire album, it’s usually around $10, far less than the regular price in any store. You can even get some for less when they have fewer cuts (Rick Wakeman’s, The Six Wives of Henry VIII is $6, since it only has six songs). Considering iTunes lower costs it’s pretty reasonable and logical.

Just looking, the London Symphony Orchestra’s version of Beethoven’s 9th Symphony is $9.99 on iTunes and $13.98 (plus shipping) on Amazon. I’d guess it’d be around $17.00 if you bought it in a story. Nothing irrational about that.

The cost of manufacturing a CD is very low – in the quantities they’re using, it’s probably around the dollar. Maybe a dollar goes to the artist. The rest goes to marketing, studio production expenses, distribution costs (the CDs don’t get into the record stores – or even into Amazon.com’s warehouse – for free), to pay the expenses of the store that sells them, and to pay the expenses of CDs that flop, and of other groups that are just starting out.

Marketing is essential. The CD money funds live tours (most of which break even at best: there are only about 25-30 groups at any given time who can make money touring). It makes sure people know about the CD: whether you know it or not, every CD you buy (perhaps excluding classical) is due to the marketing efforts of the record company. Even if you never heard an ad for the songs, you have heard the music somewhere (marketinb) or a friend has (marketing) or you saw an article (marketing), etc.

Also, the money when you buy a CD by musician A goes to subsidize musician B, who you may not have heard of yet, but who you’ll eventually like even more. Some of the money from the sale of Million Dollar Artist goes to pay the expenses of Obscure But Talented Artist until the latter can sell their own records.

20

Not if you have fairly regular inventory turns. It isn’t that bad. I have a really good idea what the wholesale price on an album is, and what the markup is at Wal-Mart/Best Buy/Target.