Monday, March 10, 2025

False Savings: When a Bargain costs you more

     U.S. people love to get “bargains”. Even relatively rich people like to think that they are getting more from their money. But, often, those bargains are just not what people think they are. One example that always comes to mind for me is that of our daughter when she was purchasing perishable vegetables. But three tomatoes for $2 instead of getting a single tomato for a $1. Obviously a bargain — right? But what about if you only eat one tomato out of the three before the other two go bad? You now have paid $2 for one tomato. No longer a bargain is it? Quantities of perishable food is one category of potential false bargains.

     People like to watch movies about wars (that they aren’t part of and don’t have any risks from). Tanks are always a favorite to watch. They’re so big. They obviously show a strong defence don’t they? Well, no — not within the current wars around the world. (I’m sure there are still specialized needs for them.)

     However, the money used to construct them (and store them) are important to local economies (but NOT important to any war/defence budget) — so these end up part of the many “porkbarrel” contracts which inflate the defence department’s budget. (So strange — huge amounts of known waste but “sacred” because they are (inappropriately) associated with “defence”.) This is a category of obsolescent needs.

     People in the US seem to often celebrate their lack of arithmetic skills. Who needs them? We have calculators and Yahoo and all, don’t we? We expect, when we go into a supermarket, that we will get lower prices (per unit) for large quantities in comparison to small quantities. And, most of the time, that will be true. But you have to watch it. A 32 oz. jar at $3 is NOT a bargain in comparison to a 16 oz jar at $1.25. (Another trick, whole numbers seem to be smaller.) How about 16 oz. for $1.25 and a quart at $3? Changing the units (from ounce to quart) is an acceptable ploy to mislead.

     Similar to the tanks above, maybe we just don’t need it? We have walked along in a shopping mall and often encountered a nice briefcase, in a display, for $50. But we don’t really need a briefcase and $50 seems like a lot of money. But, we are used to seeing it and thinking about it. What happens if we come back from work and see the window with a clearance sign saying “$22.50 for briefcase”. We’ve been looking at it for what seems like “forever” and it might not be there soon. So, we buy it. Nice looking briefcase gathering dust in the closet. Did we save $27.50 or spend $22.50? Both, of course — but how many such items of “bargains” do you have hidden away within your house?

     Go down to the local car lot. See that gorgeous truck there in the lot. It has the capacity to carry an entire living room’s worth of furniture just in that truck bed. You lean back and have fantasies of the neighbors all wanting to use it and thinking you are great because you have such a piece of machinery. But, what is reality? How often do you need to haul around a living room’s worth of furniture? For all purposes, how often do you need to haul around something larger, or heavier, than fits into the trunk of your compact car? Our economy loves you for it but buying something that you may use one or two days out of the year is certainly a luxury.

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False Savings: When a Bargain costs you more

     U.S. people love to get “bargains”. Even relatively rich people like to think that they are getting more from their money. But, often, ...