What? Prices at retail are rigged, too? Even on Black Friday, that most holy of all shopping days? Heaven forfend!
Most deals, however, are planned to be profitable by setting list prices well above where goods are actually expected to sell.
So you mean to say that prices aren’t set according to supply and demand? Everyone knows that supply and demand are the ultimate arbiter of prices in a free market economy–they teach it in school, after all. School!
Well, maybe supply and demand played a role at some point, because the article says:
“Retailers didn’t always price this way. It used to be that most items were sold at full price, with a limited number of sales to clear unsold inventory. That began to change in the 1970s and 1980s, when a rash of store openings intensified competition and forced retailers to look for new ways to stand out.”
Know what else changed in the 1970s? Pure fiat currency was introduced as a result of the Nixon Shock, when the Bretton Woods agreement was ended and the U.S. dollar was severed from all connection to reality. It marked the true starting point of the economy we are now suffering under, in which prices aren’t real, money’s not real, indeed nothing is real but it is something to get hung about!
And here’s why all this is something to get hung about–because as the article states, we’re being conned:
“Enter high-low pricing, a strategy designed to create excitement and lure shoppers by dropping prices for occasional sales.”
We have to be “lured” into doing things. That’s how we’re seen by these predators: not as hard-working people to be treated fairly with an honest price for a quality item, but as marks to be taken advantage of and tricked. It’s very much as though our entire “economy” is a cheap carnival game where we can win the giant teddy bear with the sunglasses if we can just toss a ball into a basket, but of course the basket is set up to reject the ball almost 100% of the time so the carnival never loses (or never loses very much).
Indeed, that’s what’s described here in the article in a discussion about JC Penney and its pricing strategy from a 2012 presentation:
“Customers were receiving an average discount of 60%, up from 38% a decade earlier. The twist is they weren’t saving more. In fact, the average price paid by customers stayed about the same over that period. What changed was the initial price, which increased by 33%.”
I was heartened to read that there are lawsuits being filed over these practices. But given the corruption of the courts and the great hesitance of the legal system to provide relief to the “consumer” particularly when that relief has to come at the expense of these corporate monoliths, I don’t have much hope of the lawsuits changing anything.
So what will change things? I don’t know, but maybe if people started to be honest with themselves about the fact that no retailer is ever going to give people a deal that is worth camping out in the cold or trampling other people for, maybe some of this madness will end. As long as we buy their propaganda, they’ll continue to sell it. Or, as the Minutemen put it, “psychological methods to sell should be destroyed.”
And that’s because we have a system in which the price of something is of utmost importance. Indeed, given that we have a system in which, as Yves Smith says, “We have to sell our labor (or be supported by someone who does that) as a condition of survival,” it behooves us to make sure that the prices we are being asked to pay for things have some basis in reality, are not purely fictional, and not designed to trick us. And it behooves those of us who understand that everything is rigged to help those who think that supply and demand have anything to do with pricing see the light. It is something to get hung about…