"Buy One Get One Free!" This is a famous advertising slogan within the U.S. Often it is shortened to just BOGO. Do they really give you one "free"? Of course not -- try asking for just the free one. They will respond with a laugh if they are in a good mood. Financially, it means they are selling the product for half price (50% discount) but -- from a consumer/shelf rotation point of view -- it is not quite that. By requiring you to buy two in order to get the discount, they are also increasing their sales volume. This is the non-food version of supersizing -- the food version of which I expand upon in my blog on "supersizing".
This advertising method is also used for other percentages and other quantities. Buy Two Get Three Free (60% discount with five products sold). No matter what the actual proportions, it is a method of advertising and tricking the brain into thinking that something is "free". Another variant is to have a "sale" offering 10 of product G at D% off. Or, in a specific example, if the article usually sells at $1 the offer is to sell 10 for $6. Sometimes, the advertising also says "must buy 10" -- sometimes it doesn't -- but, a lot of the time, people will still feel the urge to buy a full 10. (Read the entire sales quote including the smaller print.)
Of course, this type of "free" doesn't have to be within the same merchandise. "Buy Product X and, for a limited time, we will toss in Item Y (which we haven't been able to sell on its own) FREE." This has the big advantage of reducing inventory on Item Y. This is not saying that Item Y is not a good item -- but it doesn't have the appeal necessary to sell it by itself at a good profit margin. Product X gets a boost in sales attractiveness without directly discounting its price.
In the above cases, the primary economic advantage is selling more products. In the U.S., and in most of the larger countries, consumerism is a heavy factor in the economies of the country. From this orientation towards consumerism, many factors are emphasized within society. These include expanding feature sets, obsoleted -- and "new" future fashions, minimal useful worklife, and so on. In the past decade, a transition has started being made from physical to electronic products -- higher profit margins and less required capital with an ecological benefit. However, this causes labor redistribution and retraining ("no free lunch"
"There is no such thing as a free lunch!" Absolutely true -- but it may be absorbed into another existing budget -- this can either be within a corporate advertising budget or within a system of taxation. As mentioned in the previous paragraph, it can also apply to benefits in one area requiring extra effort or pain in another.
My wife and I often get calls of the nature: "you are the winner of a free vacation to our wonderful resort in Paradise, Country X". We are of a certain age that is expected to be looking towards retirement. We "won" because they have determined (from extensive data mining and other methods) that we can potentially afford something and that we have a reasonable chance of actually buying it. They may have also researched a "soft touch" factor on us (how well do we resist sales techniques). At any rate, we are part of a group of "winners" and, statistically, they are likely to get more profit/sales out of the group than it will cost up-front to get us all to their resort and pay for the advertised benefits.
This isn't saying anything bad about the resort -- it may be fantastic and it might even be something for which we might be grateful for the opportunity to purchase. But it is an example of how something "free" is incorporated into a larger budgetary item -- in this case, advertising.
Tax budgets are another situation where "free" items are incorporated into the budget. In this case, since the taxation is mandatory, the items labeled "free" are usually called such by a group of people wanting some OTHER use of the money (they rarely want the money left with the people -- though that may be denied). So, "free" is bad and implies that it is an unearned "gift" from the taxpayers.
Taxpayer revenue forms a budgetary pool just like the general revenue of a corporation. Within that budget, there are various allocations. Each allocated budget item is "free" from the point of view that it is paid for by the entire pool of taxpayers. On the other hand, NONE of the budget items is "free" because they are ALL paid for by the entire pool of taxpayers. Priorities are determined within the budget for items and there is considerable disagreement between groups of people as to what those priorities should be -- but the use of "free" to describe usage of the budget is a political term and not a financial one.
So, is free truly never free? No -- not quite. Currently, people can still breathe without cost. Freedom to drink potable water is becoming a greater and greater struggle but it is still free in some places (in others, it requires community subsidization and allocation). There are places in the wild where (often against the rules) you may be able to eat wild vegetation, or hunt/trap animals, just because you are there. I am sure there are other examples that are outside of the general economy. But -- within the societal economy -- "free" means being paid for via some other person, agency or budget. Can you think of exceptions within economic society?
