What's your favorite unethical business practice?

In My Humble Opinion
21

No one’s mentioned the biggest little scam (and perfectly legal): Extended warranties.

I was suspicious the first time someone brought them up and it was exactly what I suspected: pure profit for the company offering them (which is why they push them so hard).

This isn’t protection against failure – that’s covered by the manufacturer. If something doesn’t fail in the first 90 days of the warranty, there’s little likelihood of there being a manufacturing failure. So they are charging you for something that has no real chance of happening.

And they charge a fortune; it’s usually cheaper to buy a replacement than buy a three-year extended warranty.

If people offer, I tell them if they think I need this, I’ll go somewhere where they don’t sell junk that won’t last three years.

22

“Allowed”? Allowed by whom? The government? Well then, why have businesses at all? Why have competition, open markets, free enterprise, capitalism?

It’s very simple: If you don’t like the product/marketing/handling fees, don’t deal with the company. Get it somewhere else. Caveat Emptor and all that.

Competitiveness in the marketplace, however, means that the prices all fall out to around the same thing. Now obviously this only works if we’re comparing apples to apples. Not beans to airline tickets.
If it’s not available somewhere else, as in a monopoly-utility situation, then we’re pretty much screwed, aren’t we? Until we collectively do something about it, our only choice is: Don’t consume electricity, which isn’t that much of choice really, for the average person.

The grocery store purchases products in vast quantities. Volume. The supplier can much more easily sell at lower prices without adding on shipping and handling because he’s selling tons of product. If he wants to supply that grocery store with his tons of product, he better not be charging other fees unless his competition is doing the same.

23

[continuing hijack] Capitalism is supposed to go with competition and free markets, they are what make it work. If your dual discount stores close the majority of small local businesses, and then you close one, there is no more local free market, and you get to raise prices. If someone tries opening some competition now, as a chain you lower prices locally and get rid of them again.

Free markets require the buyer to know what the price is. Fooling the customers prevents competition. If, oddly enough, such a practice is suddenly widespread through all competing businesses, the customer can’t even decide to avoid sellers using this practice.

There is federal law against “conspiracy in restraint of trade”. Hope this administration enforces it. The Microsoft case makes you wonder.

Odd how many “free market capitalist” advocates excuse anti-competitive practices. [/hijack]

As to the OP, I had thought fraud (the bogus sales for instance) was the cheesiest, but bait-and-switch with jobs has to be worse.

24

I have absolutely no objection to paying the cost of shipping an item to me that I order through a catalog or online or whatever. I also have no real objection to “handling” fees, except that, hey, you should be paying your employees out of the cost of the good you sell and not expect me to cover that cost for you. What really frosts me about “handling” fees is that they escalate based, not on weight or number of items ordered, but total cost of the order. Does it make any sense that I can order, say, three huge bulky beanbags for $20 each and pay less in handling than I would pay for ordering a single gold bracelet for $200 from the same company? That as far as I’m concerned is a flat-out ripoff and I refuse to do business with companies who escalate handling fees based on how much you order.

25

My prior post does not necessarily attribute bogus thinking to other posters in this thread, it is more of a reaction to a variety of news events over time, and foolish advocation by various people on the subject.

Adding this, since I want to argue the merits, not personalities.

26

My actual favorite is the “sign up for such-and-such a service and we’ll send you a $50 debit card at such-and-such store”. I thought these give-aways were over with the bursting of the .com bubble. But there are still plenty of them around. Of course, the monthly fees for the services are huge. But if you are extremely disciplined and keep detailed records and outlook reminders you can almost always cancel the service before the deadline and keep the give-away item without getting your first monthly charge.

Of course these companies know that lots of people who sign up for these services are planning on cancelling at first opportunity. But people in general aren’t very good at keeping track of such things and will be stuck for at least a few months of bills. Or they will try to cancel but a customer service representative will bully them out of it.

But my wife is very organized about such things, due to the magic of computerized scheduling. She isn’t afraid to spend some time on the phone for this, and she can be a major hard-ass with customer-service people who try to lie to her about what the agreement said. And she isn’t confused by sales pitches about how she really does want their crappy service after all. No, she’s sure she doesn’t want it, and isn’t embarressed about demanding cancellation. If the company didn’t want to give us free stuff they shouldn’t have made such a tricky offer in the first place.

27

Otto, the business is paying their employees out of the cost of goods they sell. (Or cost of production or what have you) Shipping & handling are not included in the cost of goods, under usual circumstances anyhow. Employee wages are. I believe this is a normal GAAP. At least it is on my company’s income statement.

Again, the end-user pays the costs of getting their goods delivered in most cases. The company selling you a gold bracelet is in the gold bracelet business, not the shipping business.

However, you have a point in that typically, larger, heavier items cost more to ship than small items. That really does make no sense.

Okay, now I better shut up and stop hijacking this thread. Sorry, Thea Logica :slight_smile:

28

**

You don’t see how this is unethical? A person is hired at a new job believing that the employer intends to hire them permanently the employer only intends to use their services as a temporary employee? The new hire is told that the probationary period is an evaluation period, and if their job performance is good, they will be kept on and receive benefits. “No, prob”, the new hire thinks. “I’m being hired to do the exact same job as I had with my last employer, only for more money, and I was constantly being taken aside and being told what a great job I was doing, how I gave such great customer service. I should be a shoo-in.” Then, after 80-odd days of doing a good job, or at least a better job than about half the people who work there who have passed their probationary periods, you are told you’re “not meeting the standards of service”, which is a standard line, and handed a pink slip. And negotiate for something better? The 90-day probationary period is company policy, and not subject to negotiations.

** No, I think the company must employ the employee so long as the business is profitable and the employee is doing their job well and not engaging in misconduct. To open two stores in a small area with the intent of running all of the local competing businesses out of businesses and then closing the less profitable store (which still may be making millions of dollars in profit per year) and putting all of those employees out of work is downright immoral.

TaxGuy, I have a feeling you are confusing law with ethics. If it’s legal, it’s perfectly OK to do it, even though it causes harm to people.

And if you don’t see anything wrong with deliberately misleading prospective employees in order to get them to take jobs that you know will only be temporary, I think you need to go out and buy yourself a new value system. The one you have now felches week-old roadkill.

29

My favorite is more of a scam than a business practice, but -
[ul][li]Get a list of people who have invested in the stock market in the past. [/li][li]Divide the list in half. Say there are 500 people on each half.[/li][li]Make up two form letters. Both letters say that you have developed a mathematical model that can predict stock prices. Pick a well-known, but volatile stock. One of the letters says the price will go up; the other says it will go down. [/li][li]Mail one letter to one half of the list, and the other letter to the other half. [/li][li]Whichever way the stock actually goes, divide that half in half again. Repeat the process with another stock and another set of letters - one says the stock is going up, the other it is going down. [/li][li]Whichever half got the letter correctly predicting the stock movement, do the same thing again. [/li][li]You now have sixty-some people who are convinced you can predict the market. Send all of them another letter promising a list of stocks and their predicted movements for a substantial fee.[/li][li]Bank the money, and start over with another list.[/ul][/li]
Regards,
Shodan

30

Anything having to do with the music business. Overpriced CDs that they don’t want you to copy, even for your own use. Crap acts that are marketed enough that people with actual talent cannot make it anymore.

But the worst are the pricing schemes for live concerts. As an example I saw the following on another board I frequent:

$28.00 Concert Ticket
$1.50 Building Facility Charge ea.
$7.50 Convenience Charge ea.
$3.90 Order Processing Charge ea.

$40.90 Per Ticket —> Just charge $41 upfront and be done with it. And all this for a band that I’ve never even heard of before.

I like live music but I’m turned off by the overpriced tickets and all the secret fees to the point that I just don’t go anymore. The last concert I saw was Clapton about 4-5 years ago, and not only was that a great show but we also got to see a beautiful blonde-model-Barbie doll type in the row behind us and across the aisle - and I swear on my mother’s grave this is real - on her knees and blowing her date during a guitar solo. Really, how could another concert ever be better than that?

31

I went with Columbia House DVD Club. They tried sending me something that I didn’t order and then charging me for it. What they did is they send me an e-mail saying if you don’t respond to this e-mail telling us you DON’T want this DVD, we’re going to send it to you. I only found out that’s what they did afterwards, when they tried it again.

Anyway, to my surprise, I found this charge on my credit card bill. I went through my records, trying to figure out what it was. Then went online through my account info when I realized what had happened. I immediately called my credit card company and told them what happened, they cancelled the charge and I kept the DVD they sent me unsolicited for free. And that, kids, is how I came to own Road to Perdition.

32

What I think Otto is concerned about isn’t normal shipping and handling, it’s excessive shipping and handling. Excessive to the point that we all know the highly discounted price is subsidized by the high handling charges.

I’ve noticed a few TV commercials promoting “free” lifetime supplies of this or that, all you need to pay is shipping and handling. How much do you want to bet that the S&H charge on “free” weed trimmer strings or “free” pariffin wax will be quite high in relation to the retail value? This is the same scam being pulled by some Ebay sellers, jack up the handling, sell for lower price, give less cash to Ebay.

33

I used to work for a major pesticide company and they would cheat their employees out of their season end bonuses

Here is how it worked…I had put in more time and energy than practically anyone one I knew in the company(I had to drive about 300 miles per day when the average distance traveled with techs in the company was 50 miles each day) and was looking forward to a fantastic bonus based on the farms I had done over the summer…it gets close to bonus time and my boss now tells me I have to have a certain percentage of the farmers paid in full by a certain date so I go to each and every one and tell them my bonus depends on them paying by that date and virtually all pay(they liked me and were hoping I’d stick around to do them the next year too as they had trouble with previous techs from the pesticide company)

I had the highest completion rate of anyone that year…the highest paid in full rate too(NO one on my regular route quit the program…that was rare too)…my boss waits until the dead line passes for the bonus then tells me since I was a SWING tech(I did my route PLUS anyone elses who didn’t show or did a bad job) I was responsible for ANYONE(who quit the program) I did even ONE time that summer even if they quit the program because their normal tech did a sucky job and there was no way on Gods green Earth I could of done anything different

I found out later from other techs that NO one EVER gets the bonus their first year(my boss keeps it himself)…we are talking about many thousands of bucks too(from me alone)

I told them I wouldn’t be back the next year if they were going to rip me off…small consolation but I kept in touch with some other techs and they had to hire THREE people to do the job I did the next year(also alot of the farmers on my route quit when they didn’t like the new guys they hired)

Next job was for a taxi company…they cheated me too

We would take vouchers for alot of people and the taxi company would take 37% of whatever the voucher was PLUS the regular lease rate for the cab

My job was to haul the people around and the taxi companys job was to collect for the voucher(that is why they got the 37%…so they said anyway)…however if for ANY reason they could not collect for the voucher we were REQUIRED(as drivers) to accept…the DRIVER was out the money not the company(they would add it on the next days lease for the cab)…I had vouchers that were almost $500 sometimes so you can see we are talking serious money

I had a little talk with the owner of the company and the end result was I decided getting cheated was not in my best interest so I left that job too…many other drivers left too after the owner started that policy

Most of my life I had been a farmer and those were the two main jobs I had after that…I decided working for someone else was not for me and now I sell online full time

Now if my boss screws me at least I can finagle a dinner out of it
(not always…my boss is a real bastard)

BTW My girlfriend had told me most employers will cheat their employees and I didn’t believe her…she told me all HER stories and I always kind of thought she was exaggerating…it didn’t make sound economical sense to me to screw your own people.
I ran a farm for over 20 years and never cheated anyone who helped out but my experience says otherwise once I left the farm

I am sure there must be some employers who don’t cheat their people…somewhere

IMHO A company that cheats their OWN people is a company that I suspect would cheat their customers too

34

I usually feel this way about extended warranties, except for replacement plans for PDAs. As it’s been explained to me, most PDAs are built such that if the internal battery fails, it has to be shipped back to the manufacturer and costs ~$100 to fix the problem. Buying a $50 extended warranty made sense to me - and paid off when my last PDA failed 11 months after purchase. Since I had a replacement plan, not an extended warranty, they simply applied the purchase price of my old PDA towards a new one on the spot.

35

WOW! THANK YOU! I finally found a way to pay for college! :o

(just kidding)

36

Some us believe that it is unethical to treat people like shit. I know, I know, it’s capitalism and all, but still, it’s also treating people like shit for profit. And it’s unethical, wrong and evil.

**I think that what the OP calls “unethical” most folks just call “capitalism.” This is just how stuff works, and like it or not, it’s the best economic system the world has ever seen. **

I’m sure that people used to say the same sorts of things in defense of slavery. We found a better way than slavery, eventually we’ll find a better way than capitalism. The fact that we haven’t found a better way yet doesn’t mean capitalism’s excesses aren’t unethhical, just as the fact that we hadn’t got rid of slavery until 1865 didn’t mean that slavery wasn’t unjust prior to emancipation.

37

Those part-time eBayers are especially the types that SHOULD be charging for packing and handling.

Boxes are not free. Heck, they’re not even particularly cheap if you have to buy them one or two at a time. Sure, they can be re-used once or twice, but there is a limit to how tattered a box can get before UPS or FedEx will accept any damage claim because the box split open.

Even if you get cheap or free boxes, packing tape, bubble wrap and peanuts cost money. The “little guys” wind up paying more for shipping because they don’t have the volume to get a discount from the shipper, and can’t afford to buy packing material and boxes in bulk, let alone standardize on one or two sizes.

Even getting the boxes to UPS or FedEx costs money - gas and the seller’s time, or a few bucks each to have them picked up on their schedule - you need to wait around for them to show up.

So, would you rather pay more up-front in the form of a higher opening bid or reserve, or pay more at the end for careful and proper packing so your item arrives intact?

Case in point - last week, I shipped out a Mixmaster with two glass bowls. Each bowl was individually bubble-wrapped, and the mixer “head” was taken off the base and each piece was wrapped. I charged the buyer whatever the FedEx Home delivery quote was plus three bucks to cover the cost of bubbles and tape. Not exactly a large profit center, considering how many yards of bubble wrap went into the box.

The item traveled from San Francisco to South Carlolina and arrived safely. Happy buyer. :slight_smile: Now, compare this to a mixer I bought from someone who simply put a couple pieces of newspaper between the bowls and left the heavy mixer head on the base, thinking it’d be OK for a 70-mile journey. One bowl was smashed and the base was destroyed when the heavy head snapped the mount off the base. :smack: I now have one bowl and some garbage, and have to wait for UPS to come by to look at the sad remains and start processing the claim. I’d have paid ten bucks to avoid the mess. Strike that. I’d have taken the three or so hours to drive over to wherever to pick it up in person. :mad:

38

What Evil Captor said.

39

I can’t believe no one has mentioned the most famous scam I hear on a regular basis - every long distance carrier and time share company do this one:

Telemarketer: “Mr. Yarster, if you switch carriers/ attend our timeshare seminar, we will give you [insert valuable item here]”
Me: “OK, but this sounds a little suspicious, can I get your name?”
Telemarketer: “Yes of course, my name is Patty Screwyoubadly, and you can reach use at 1-800-HOT-DEAL”

You switch phone plans or attend the seminar and get nothing or the bait and switch, at which point the following occurs:

Me: “Yes, I agreed to switch carriers/ attend your seminar on the basis I would receive [valuable item].”
Telemarketer supervisor (scam #1): “Well you probably don’t know who you spoke to do you? If not, how do I know who to address this matter with?”
Me: “Actually it was Patty Screwyoubadly, and she told me to call this number!”
Telemarketer supervisor (scam #2): “Oh, Patty was reprimanded for that before and was fired a week ago”
Me: “Well this is false advertising! I want my [valuable item]”
Telemarketer supervisor (scam #3): “Well Mr. Yarster, I can’t really give you [valuable item] because we no longer offer it/ never offered it and Patty lied to you/ can’t offer it unless you do something else for me.”
Me: “Well what if I ask the state attorney’s office about your sales practices?”
Telemarketer supervisor (scam #4): “Mr. Yarster, I AM INSULTED you would imply such a thing about us. I would be more than happy to give you [useless crap] instead, and only because I feel SO BAD that Patty gave you such poor service”

40

well the insurance industry as whole has been a continuing scam for hundreds of years.
I am really surprised that no one metioned the biggest business scam of this age.

SPAM

need I say more?