Thursday, June 28, 2012

Pricing Soapbox

Finally, I can be like my friends who say, "OOOH...this is *so* going in my blog" - and not be lying!

One thing I've never understood is how some companies have lifetime satisfaction guarantees, with attendant return policies, but don't have price guarantees on their products.  Suppose I buy a sweater for $30 and the price drops to $25; the company should refund me $5 if and when I call.  But if they don't, in principle, I could return the sweater for $30 and buy a new one for $25, costing the company much more in the long run (and causing everyone more inconvenience).  I guess they figure no one will bother to do that.

1 comment:

  1. This is not unlike mortgage refinancing, wherein a mortgage holding company is often in a position in which they could simply reduce your interest rate, or even allow you to refinance with them directly. Instead, they put up barriers that force you refinance through a 3rd-party institution, which ends up costing everybody more.

    I figure that the same economic principle applies to both situations: It is not that they figure that no one will bother going to through the hassle, but rather that the cost savings of catering to people go through the hassle is not enough to offset the increased revenue of maintaining the barriers.