Death By A Thousand Cuts + One

Remember this picture? You may recall my blog post back in February 20, 2012 “Death By A 1000 Cuts” where I revealed evidence uncovered by my wife (an ever vigilant and tireless whistle-blower for the latest consumer shams perpetrated on the public) about how we consumers are being shorted on the toilet paper we buy. The company had just started delivering toilet paper on shortened length cardboard tubes – resulting in your receiving 12% less product than what you previously paid for.

Ingenious to be sure; but surely, what more could Corporate America possibly come up with that could top this nifty little rip-off on we unwary consumers?

Well I have apparently again underestimated the innovative thinking of American companies; Check out the following latest scam my consumer detective wife just uncovered:

Yes, now not only is the cardboard tube SHORTER in length, they have also now slightly INCREASED the DIAMETER of the tube! With a larger and shorter spool, they can sell us even that much LESS product for the same price!

No doubt that these little “tricks” fall under the radar when Washington is calculating the Consumer Price Index or Rate of Inflation. After all, the actual prices for consumer goods show no noticeable increase, we all simply get less product for the same dollar.

We may try to be savvy consumers, but really, at some point, who has the time to sort through a shopping cart full of products to determine the extent to which we are increasingly being scammed? 

Power to the People

While we were in Hawaii we flirted with the idea of buying a second home, maybe a condo on the Big Island. In the real estate ads we noted several references to properties that had photovoltaic panels.

Later over dinner with friends of ours who live on the Big Island we asked about the prevalence of solar panels. They revealed that their electric bills were extremely high; averaging around $600 per month. This last Christmas when he had holiday lights on their house, the electric bill rose to $800. Homes in Hawaii generally do not require heat or air conditioning, so we are talking about just powering lights, refrigeration and hot water.

Hawaiians who can afford it have been availing themselves of State and Federal energy programs to subsidize installation of solar panels and photovoltaic panels on their homes. Another person we were talking with revealed that his photovoltaic conversion cost $47,000 a third, of which, was his cost after government subsidies. At these electric rates, he expected his photovoltaic installation to pay for itself in reduced electric bills in roughly five years.

As chance would have it, the very day following our conversation, an article appeared in the West Hawaii Today newspaper detailing that, due to the increase in home photovoltaic panel installations, Hawaiian Electric Co. has lost significant revenue. As a result, the HEC would be raising it’s rates to make up for the loss in revenue. In other words, sell less electricity at higher cost. Renewable energy, it seems, is bad for business and the rate payer is expected to pick up the tab.

As I outlined in my two previous posts, the trend is clear: Corporate America will continue to find ways to suck more of our individual income and give us less in return.

References:
“Hawaii solar savings spark higher electric bills”, West Hawaii Today, Feb.6, 2012.

Death By A Thousand Cuts

Death By A Thousand Cuts can refer to:

- Creeping normalcy, the way a major negative change, which happens slowly in many unnoticed increments, is not perceived as objectionable

- Slow slicing, a form of torture and execution originating from Imperial China
~ Source: Wikipedia

Pictured above are two spent cardboard toilet paper tubes; you will notice that one is a bit smaller than the other. My wife is an avid recycler; she retrieves these tubes from our bathroom trash were I toss them and adds them to our household recycling. She noticed that the latest batch of toilet tissue was now being produced in a smaller width. The same number of plies, the same number of rolls per package, and at the SAME PRICE… everything the same with the exception that the customer now get 12% LESS product for their money.

This is not a new tactic in the never ending assault of commercial interests to tap a much of our dwindling consumer dollars as feasible. For example, cereal boxes on the grocery shelf appear to have the same height and width, but the packaging is not as deep; a nuance not readily visible as one browses the grocery aisle. Plastic containers have been redesigned to increase the size of the bottom “dimple” lowering the volume of products by 2 or 3 ounces though the container appears to remain the familiar size. A 6 ounce can of tuna today contains 5 ounces of product.

However this marketing tactic is not reserved only for consumer products. Our health insurance premiums had been increasing steadily at the rate of 11 to 15% each year over the previous years. So we were pleasantly surprised (initially) to find that our cost of our health insurance, which had been $1,150 per month last year, would remain this same amount again this year. Instead the insurance company has increased the costs of deductibles, co-payments and fees for special surgical procedures. We will now be required to pick up the first $1050 in medical expenses before the insurance company pays a cent of our medical bills. The premium has remained unchanged but the additional cost in the not-so-obvious charges essentially results in a 7.6% increase in our costs for insurance over last year.

The trend is clear, we consumers will be expected to pay more for less at every turn… and a great majority of the population will never even notice. I confess that I certainly would not have noticed how we are being gypped on toilet tissue had not my diligent little recycler lady noticed the change.

More than ever the rule of Caveat emptor applies– the trend toward redistribution of the wealth will continue, but not quite in the manner in which the Republicans like to frame the issue.

Rip-Offs and Rebates

A few years back when the “rebate” was conceived, I figured it was a pretty desperate marketing ploy to (try) to fool consumers. The idea was to imply that purchasers would get cold hard cash-on-the-barrel-head back if you bought their product. Back then I believed people were smarter than I believe they are now. I assumed everyone would see through the ruse immediately – the retailer upping the price of their product and simply giving them some of their own money back. Wrong!!! Consumers (some of them even good friends of mine) were completely taken-in. Rebates worked… all too well, as it would turn out.

Then it got worse: The “mail-in” rebate – advertise to the consumer they will actually pay a lower price for the product after receiving a rebate in the mail. All the consumer has to do is fill out a form (don’t we all love to fill out forms) and mail it in along with the (original) receipt and the cardboard box the crap came in to the company… then wait. What a scam!

The numbers are foggy, but of the people who decide to buy a product based on the promise of receiving a rebate, anywhere between only 2% to 60% ever actually receive their rebate. The psychology strikes of genius - Most people never bother to complete the paperwork or send it in. This means that, even though you bought the item thinking you would pay less, most companies instead end up pocketing the money they promised to rebate to you.

I was taken-in in also; I had the misfortune to believe I would get a rebate when I purchased a pair of Motorola walkie-talkies. I even sent in the rebate materials via certified mail as proof that they received it. I spent more time and money in phone calls and letters... but I never received my rebate. I mean “never”... as in: I will never buy anything from Motorola again.

Another scam I see a lot recently with car companies is the Manufacturers Suggested Retail Price (MSRP). Of course the manufacturer is going to set the retail price very high so it will appear as though they are offering significant discounts. We visited a local furniture manufacturer’s showroom in town once – Inquiring about the price of a table, my wife asked about the convoluted price structure on the sales tag. The sales person implied what a great deal she would get if she purchased the item for the discount price below MSRP. “But aren’t YOU the manufacturer”, she asked? The sales person stammered a bit. Generally, you could also refer to the MSRP as actually the JU (Jacked-Up) price. After your “discount”, you end up paying the full retail price you would have paid for the thing anyway.

Rebates are studies of the intricacies of contract law; and there are all kinds of laws covering rebates in marketing and sales... all of them designed to protect the company, not the consumer. I would be nice to see that changed… say, having the company that stiffs you end up owing you TWO TIMES the amount of the rebate if they don’t get it to you within 60 days - maybe keep that penalty multiplying for every month the rebate is outstanding.

Recently OfficeMax has completely done away with offering mail-in rebates, primarily due to so many customer complaints, and is opting instead for instant rebates paid at the time of purchase. Your best protection is to either avoid buying products that offer rebates altogether or choose only in-store rebates. Until then, most consumer morons will continue to believe that the retailer is relinquishing some of their hard-earned profit because they are so damn happy you bought from them. But don't take my word for it... Send me crisp $20 bill and I will send you a $10 rebate! How can you lose?