# What businesses drive you insane with indefensible or incoherent pricing policies? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 10, 2007, 6:20am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601 "2007-02-10T06:20:11Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [February 11, 2007, 7:58pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/61 "2007-02-11T19:58:21Z")
[QUOTE=Burrido] 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. [/QUOTE] Shaving cream. Same stuff, men’s 84 cents. Women’s, with a touch of scent and a pink can? $3. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [February 11, 2007, 8:04pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/62 "2007-02-11T20:04:36Z")
[QUOTE=lezlers] Saturn used to do that, don’t know if they still do. If I recall, their whole marketing strategy was “no haggling.” [/QUOTE] I remember Daewoo’s entry into the British market, which was along the same lines. ---
**Author:** ![Kevbo](https://avatars.discourse-cdn.com/v4/letter/k/e47774/32.png) [@Kevbo](https://boards.straightdope.com/u/Kevbo)\ **Post date:** [February 11, 2007, 8:33pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/63 "2007-02-11T20:33:29Z")
This goes back about 10 yrs. (prior to creepy commercials) Burger King had a long time reduced price on whoppers. $.99, or you could get a double meat whopper for $1.99. Or you could get two complete whoppers for $1.98. Made it tempting to tell them to hold the bun and everything but the meat on the second one. Back when Taco Hell first started offering “value meals” they cost 10-25 cents more than the total price of the identical items ordered separately. ---
**Author:** ![Rysto](https://avatars.discourse-cdn.com/v4/letter/r/ecccb3/32.png) [@Rysto](https://boards.straightdope.com/u/Rysto)\ **Post date:** [February 11, 2007, 9:02pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/64 "2007-02-11T21:02:45Z")
[QUOTE=ParentalAdvisory] I remember watching a documentary on Discovery chanel on this very thing. It’s hard to explain, but if you ever catch it, it really does make sense. All the pricing is based on supply and demand, and also airline routing. Big differences in price with airline routing. [/QUOTE] Another thing comes into play: sunk costs. Say AA has a plane scheduled to fly tomorrow from LA to New York that’s only half full, and they can’t cancel the flight. It’ll cost them about the same to send a half-empty flight as it will to send a full flight, so the airline is better off offering deep discounts on the rest of the seats and filling up the plane. ---
**Author:** ![black\_rabbit](https://avatars.discourse-cdn.com/v4/letter/b/f19dbf/32.png) [@black\_rabbit](https://boards.straightdope.com/u/black_rabbit)\ **Post date:** [February 11, 2007, 10:37pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/65 "2007-02-11T22:37:27Z")
[QUOTE=VCO3] 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_. [/QUOTE] As others have already said, that’s about 90% wrong. CD duplication with basic printing starts at two bucks each at runs of _less than a thousand_. Distribution is virtually nada. 90% of the cost is _marketing_. And the marketing expense, and least for the majors, is the same whether you’re selling online or in the stores. How the hell do you think bands can afford to sell their records for ten buck a pop at shows? ---
**Author:** ![Septima](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@Septima](https://boards.straightdope.com/u/Septima)\ **Post date:** [February 11, 2007, 11:14pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/66 "2007-02-11T23:14:53Z")
[QUOTE=Lakai] All vodkas taste the same if served ice cold. All warm vodka will taste the same by the fourth shot. There is no point for people to pay $60 for one bottle of vodka. [/QUOTE] Rubbish. Absolut vodka makes me sick, while I could probably get decently drunk on Stolichnaya. You can keep the cheap stuff. ---
**Author:** ![TJdude825](https://avatars.discourse-cdn.com/v4/letter/t/dec6dc/32.png) [@TJdude825](https://boards.straightdope.com/u/TJdude825)\ **Post date:** [February 11, 2007, 11:21pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/67 "2007-02-11T23:21:01Z")
Our local bread and bagel shop offers bagels for 50% off after a certain time. I think the deal starts at 5, and they close at 6. So I was there to buy a dozen bagels for my family, and I was just about ready to pay for them at 4:57 or something. They told me I could get 50% off, but I’d have to wait until 5. So I just kind of stood there for a couple minutes, let someone else go in front of me, and then bought them. ---
**Author:** ![interface2x](https://avatars.discourse-cdn.com/v4/letter/i/c0e974/32.png) [@interface2x](https://boards.straightdope.com/u/interface2x)\ **Post date:** [February 11, 2007, 11:43pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/68 "2007-02-11T23:43:11Z")
[QUOTE=Surbey] Car sales Jesus christ. Nothing pisses me off more than the Car Sales Industry. My father and I went to go and find a car one day and we stoped at a dealership. We told him our price range, 5600 to 7000 and the guys said “Well, the closest thing we have it 12,000 but we could knock off a few thousand to start” WTH!?@!@ Then howcome it was 12,000 to start? I don’t understand why you can’t have a car dealership that says, here’s the price. Take it or leave it. Simply make it 15% (or something appropriate) over their cost. I think they’d make a killing if they could do something like that. But that’s my $.02 [/QUOTE] I understand why they do it, but I’m not sure if I agree that it’s the best idea. The psychological effect of someone telling you “This car should cost 12K, but you’re special so I’ll sell it to you for 9K” is a lot stronger than “This car costs 9K, take it or leave it.” It just makes the customer feel like they’re getting an insider deal when they’re not. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [February 12, 2007, 12:39am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/69 "2007-02-12T00:39:16Z")
[QUOTE=TJdude825] Our local bread and bagel shop offers bagels for 50% off after a certain time. I think the deal starts at 5, and they close at 6. So I was there to buy a dozen bagels for my family, and I was just about ready to pay for them at 4:57 or something. They told me I could get 50% off, but I’d have to wait until 5. So I just kind of stood there for a couple minutes, let someone else go in front of me, and then bought them. [/QUOTE] WAG - the till changes the prices, and the staff on the front line have no ability to override it. ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [February 12, 2007, 12:57am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/70 "2007-02-12T00:57:16Z")
There’s a little bakery near me that has a bizarre pricing structure; all of the prices are just a penny or two more than a very convenient and common price break, for example, a large white tin loaf might be £1.01. I think they must have just put their prices up by simply adding a couple of pence to everything. It would probably be better received by the customers if they had just put the price up to £1.10. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [February 12, 2007, 1:07am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/71 "2007-02-12T01:07:24Z")
[QUOTE=Mangetout] There’s a little bakery near me that has a bizarre pricing structure; all of the prices are just a penny or two more than a very convenient and common price break, for example, a large white tin loaf might be £1.01. I think they must have just put their prices up by simply adding a couple of pence to everything. It would probably be better received by the customers if they had just put the price up to £1.10. [/QUOTE] Two thoughts. Firstly from a local landlord, who knows from conversations with senior management that the awkwardness of pricings like this are lost on them. Secondly, it might be an original take on the use of the £9.99 pricing as a way of stopping those pound coins from slipping into pockets rather than into the till (if someone needs change, it has to be rung up, but if they give the correct price it’s supposedly more tempting for the staff to pocket the money) ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [February 12, 2007, 1:10am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/72 "2007-02-12T01:10:15Z")
Blimey, that’s cunning - I never realised it could be anything like that. ---
**Author:** ![groman](https://avatars.discourse-cdn.com/v4/letter/g/73ab20/32.png) [@groman](https://boards.straightdope.com/u/groman)\ **Post date:** [February 12, 2007, 4:55am UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/73 "2007-02-12T04:55:29Z")
[QUOTE=Mangetout] There’s a little bakery near me that has a bizarre pricing structure; all of the prices are just a penny or two more than a very convenient and common price break, for example, a large white tin loaf might be £1.01. I think they must have just put their prices up by simply adding a couple of pence to everything. It would probably be better received by the customers if they had just put the price up to £1.10. [/QUOTE] Maybe they are being shaken down by the homeless mafia that plants a man outside with the specific knowledge that anybody who used cash inside WILL have change. 🙂 ---
**Author:** ![robby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robby/32/11048_2.png) [@robby](https://boards.straightdope.com/u/robby)\ **Post date:** [February 12, 2007, 3:40pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/74 "2007-02-12T15:40:59Z")
[QUOTE=Rysto] Another thing comes into play: sunk costs. Say AA has a plane scheduled to fly tomorrow from LA to New York that’s only half full, and they can’t cancel the flight. It’ll cost them about the same to send a half-empty flight as it will to send a full flight, so the airline is better off offering deep discounts on the rest of the seats and filling up the plane. [/QUOTE] Exactly. So in my case, it was 12 hours before the one-way flight on Southwest I was considering. There were a variety of fares available, from the “Internet One-Way” for $165 all the way to the “Refundable Anytime” for $328. There were six other flights scheduled throughout the day with the same fare structure. I figured with all this availability, I’d be able to get one of the cheap flights the next day if I needed it. I was wrong. The next morning, every flight throughout the day had only the “Refundable Anytime” fare for $328. Now, I thought the whole point was for airlines to offer last-minute deep discounts to fill up the plane! Being in the situation I was in (my father was dying), I had to book one of the “Refundable Anytime” fares 4 hours before the flight left. The flight was pretty empty, too. Why offer a promotional fare 12 hours prior to a flight only to yank it 8 hours later? It’s not like the plane had filled up. As I said, the flight was not full in the slightest–I had a whole row to myself. ---
**Author:** ![robby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robby/32/11048_2.png) [@robby](https://boards.straightdope.com/u/robby)\ **Post date:** [February 12, 2007, 3:47pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/75 "2007-02-12T15:47:22Z")
[QUOTE=Sam Lowry] There’s a pretty good explanation of this in the book [The Undercover Economist](http://www.amazon.com/Undercover-Economist-Exposing-Poor-Decent/dp/0195189779), in the chapter “What the supermarkets don’t want you to know.” Basically, it boils down to the coffee shop wants each customer to pay as much as they are willing to pay. Starbucks wouldn’t be able to have on their menu:[ul] [li]Coffee: $1.50\*[/li][li]Coffee for those willing to pay more: $1.75[/li][/ul] But they are able to have: [ul] [li]Coffee: $1.50[/li][li]Cafe Mocha: $1.75[/li][/ul] Even though the added chocolate hardly costs anything… [/QUOTE] It’s even worse than that at Starbucks. At least the Cafe Mocha in your example has chocolate in it. Not to mention that it actually costs in excess of $3. Here’s a more extreme example: Coffee: $1.50 Cafe Americano: $3+ According to the Starbucks website, Cafe Americano is “American drip coffee–Italian style. Made from equal portions of espresso and boiling water. This results in a stronger version of brewed coffee.” Why would I pay twice as much for a virtually identical cup of coffee? ---
**Author:** ![Emilio\_Lizardo](https://avatars.discourse-cdn.com/v4/letter/e/898d66/32.png) [@Emilio\_Lizardo](https://boards.straightdope.com/u/Emilio_Lizardo)\ **Post date:** [February 12, 2007, 4:16pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/76 "2007-02-12T16:16:16Z")
At the Safeway near me, red and yellow bell peppers are $4.99 per pound, and green bell peppers are $2.99 per pound. They also sell a prepackaged “traffic light” pepper pack that contains one red, one yellow, and one green pepper – for $5.29 a pound. ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [February 12, 2007, 5:42pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/77 "2007-02-12T17:42:46Z")
[QUOTE=Emilio Lizardo] At the Safeway near me, red and yellow bell peppers are $4.99 per pound, and green bell peppers are $2.99 per pound. They also sell a prepackaged “traffic light” pepper pack that contains one red, one yellow, and one green pepper – for $5.29 a pound. [/QUOTE] [traumatic incident flashback]“I paid $4.98 a pound for those peppers and you’re going to pick them out of your food and not eat them?!?” Typical frugal asshole of a parent, right? Trouble was, I was in my early 30s. Real mature, Pop. :rolleyes: [/TIF] But I hear you about the convenience packs. Around here it would be the grilling ones: mushrooms and onions conveniently sliced for the grill. And crazy high. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [February 12, 2007, 6:28pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/78 "2007-02-12T18:28:08Z")
Now granted, this was the 80s, the years of wearing megalayers of shirts, but one clothing store in Sarasota always advertised “Shirts! Buy 1 get EIGHT FREE!”. So naturally I went in to look (no danger of me actually purchasing them since it was a women’s store,) and I was the only one there. The shirts were $90 apiece, too. I bet if they’d “lowered” the prices to ~$20 apiece they’d have more sales AND more money. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [February 12, 2007, 7:23pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/79 "2007-02-12T19:23:39Z")
[QUOTE=koeeoaddi] Real estate. Here in the Southwest, where the bubble is supposedly breaking, it’s almost impossible to figure out the value of anything: prices are insane, sellers are delusional and two cookie cutter houses in the same neighborhood can be priced 100K apart. [/QUOTE] On the same general topic: Real Estate Agents. The Freakonomics guys have written several times about this, but the gist is that most real estate agents do not compete on price. Commissions are 6% for everyone, which results in really inefficient practices to drum up business and is leading to the no-frills listing services that cut out the agents all together. ---
**Author:** ![TLDRIDKJKLOLFTW](https://avatars.discourse-cdn.com/v4/letter/t/51bf81/32.png) [@TLDRIDKJKLOLFTW](https://boards.straightdope.com/u/TLDRIDKJKLOLFTW)\ **Post date:** [February 12, 2007, 7:24pm UTC](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601/80 "2007-02-12T19:24:36Z")
[QUOTE=robby] It’s even worse than that at Starbucks. At least the Cafe Mocha in your example has chocolate in it. Not to mention that it actually costs in excess of $3. Here’s a more extreme example: Coffee: $1.50 Cafe Americano: $3+ According to the Starbucks website, Cafe Americano is “American drip coffee–Italian style. Made from equal portions of espresso and boiling water. This results in a stronger version of brewed coffee.” Why would I pay twice as much for a virtually identical cup of coffee? [/QUOTE] They’re actually two completely different drinks - an Americano is made with 2+ shots of espresso and water, while “Coffee” is just drip coffee brewed from ground beans. Now, we can argue about whether espresso should be more expensive than other types of coffee, but there is a definite difference between the two drinks. [Previous page](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601.md?page=3) [Next page](https://boards.straightdope.com/t/what-businesses-drive-you-insane-with-indefensible-or-incoherent-pricing-policies/391601.md?page=5)