01 December 2016
Black Friday
Buying a discount.
By Chin Chin
The word “black” has sinister connotations. The eponymous villain of the 1987 film “Black Widow” is a lady who marries rich men, murdering them once they have made wills in her favour. The black spider trout fly has proved fatal to many a feeding fish and difficult to remove from the ear of those whose casting is not up to scratch. The black widow spider has a worse reputation still. I am not sure exactly what it does to you but the very name suggests that you would rather not have it hiding under the seat of your loo. Combine “black” with “Friday”, a day that has been accursed for two millennia, and you would expect something pretty unpleasant. What is more, you would be right.
It all started in America. After Thanksgiving, people felt shopped out and takings on the high Street fell. The traditional answer to that sort of problem is to have some sales (after all, New Year sales have been a feature here for many years). Being a big country they decided to have bigger sales than anyone had ever seen – 20% off? Pathetic! 30% off? For wimps! 50% off? Now you’re talking. 100% off? Look carefully at the contract which comes with it! Black Friday is a sale with discounts deep enough to ease American wallets back open.
Of course, we followed suit. Forget the fact that we don’t have Thanksgiving here (due to not having been kept going through the winter by Red Indians) and forget the fact that Black Friday is in the Christmas shopping period (so that if people do their Christmas shopping on Black Friday they presumably reduce Christmas takings). Yes, forget all that. Once one retailer had decided it could move one or two special lines by dropping the price for a day, everyone had to do it. Isn’t that the true lesson of the Gadarene swine?
The trouble is that none of us can resist a bargain. 20% off, you read. It doesn’t matter that the goods were originally overpriced rubbish and that the discount just reduces the overpricing bit. Nor that it is something you couldn’t possibly want. Getting it cheaper makes you feel that you have got one over the retailer, however much the truth is the exact reverse.
The cleverest retailers go a bit further. After boasting of the discount, they add that the offer will shortly come to an end; indeed, sadly, that they cannot extend it. Why not, exactly? If they can sell at a particular price today, why should they not do so tomorrow? Aha, the answer to that is that the discount is only for their most discriminating customers – i.e. those who come along on a particular day. Respectable retailers don’t take money from anyone who comes along late. That would devalue the ethics of their business. Yes, of course: “the true faith of the retailer”. Silly of me to wonder.
Sometimes it isn’t just ethics which means that the offer must soon close, but the fact that there is only a finite amount of stock. “While stocks last” certainly sends the message that you could miss out, but it also says something about the stock itself. They are hoping to sell it all in the next day or two. Well, it must be top-class stuff if it will leave the shelves as quickly as that. What was that? A limited amount bought in specially? Not the sort of stuff you could normally sell? Conveniently outside the normal range because then you only have to sell one overpriced item to be able to sell others at a discount against the “normal price”? Surely not. After all, they sold one at full price to the managing director’s wife. He would hardly let her be overcharged, especially as she doesn’t like Mickey Mouse pillows. No, it must have been a jolly good price even before the discount.
Occasionally though the message can be confusing and I was surprised to get an email from BT with the strapline “Hurry, they won’t be around for long”. I must say that I was surprised. I know that Openreach has its critics and that there was a week or so last month when our telephone was off, but I had not realised that that would be enough to bring down the entire multibillion pound group. In the circumstances you can see why they have jumped at some Black Friday marketing. Get your BT shares now! They are much cheaper than they used to be, so they must be a good bargain. The company could be gone in a week so if you don’t buy them soon you could miss a discount which you could have spent in so many ways: that little holiday you promised the wife, the meal at a smart restaurant, the new kitchen. Just imagine how she will look at you if she hears that the company has gone bust and that you have lost the opportunity to buy shares at a discount to last year’s price. Faint heart never won fair lady! Never mind whether what you buy turns out to be what you want. The discount is all.
That, of course, is the rub. Not in relation to shares (discounts on those are dictated by the market rather than by the date) but in relation to the more tangible goods on offer. According to some press reports, 10% of the goods bought on Black Friday will never be used. That is because those who bought them were more attracted by the discounts than by the goods themselves. You can bet that in some cases the unused rate is well above 10%. If it gets above the level of discount, Black Friday will have lived up to its name. Still, the very wastage rate gives food for thought.
Where goods go straight to landfill, the only significant commercial transaction is a transfer of money from the customer to the retailer. The goods bit is irrelevant and a nuisance for everybody. The customer has to store the goods before they are thrown out, no doubt in a garage which could be used for something better. The local council has to ship the goods away. The manufacturer spends money on making goods which will never be used. It is all completely pointless.
How much better then to dispense with this side of the transaction and simply write a cheque for the wasted amount. Everyone who buys on Black Friday could pay a special levy equal to the amount of the goods they would normally waste. The levy could then be split amongst the retailers according to turnover. That would certainly boost the retailing sector but, wait a moment, it might be resented by shoppers as a tax increase. We need to sweeten the pill a little. I know. Anyone who paid up on the day would get a 10% discount.
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