Lending Club Blog

When is a Deal Not a Deal?

Like most people, I love a great deal. Unfortunately, there are times when an apparent deal is not a deal at all. Here are some typical types of non-deals.

When You Spend More to Save

Many deals only come into effect when you spend a certain amount of money. Saving $20 off a $100 purchase is great if you were planning to spend $100, but doesn’t make sense if you have to buy more than you want to get the deal. The same holds true when shopping sales. If a store is having a 20% off sale, should you buy what you would have bought without the sale (and spend 20% less) or buy even more so that you spend the full amount you intended, or more?

When Non-Deals Are Less Expensive

A coupon that reduces the price of a movie rental from $4 to $2 sounds pretty good until you consider that Redbox, or a similar alternative, may offer the same movie for $1. The important thing is not how much you save over a regular price but the reduction in spending that a deal offers when alternatives are also considered.

When it Generates Waste/Lacks Value

At fast food restaurants, you are typically offered a larger drink for only a few cents more. An extra 20 cents for a significantly larger cup sounds great, but only if you actually want the extra amount and you are going to drink it. If you end up throwing it out, the deal leaves you worse off. Even if you don’t plan to waste it, the value you get might be reduced by taking the deal. Many places offer unlimited free refills on fountain drinks. If I can refill my small cup as often as I like, I can get just as much as someone with a larger cup, for less money.

When You Know It’s Too Good To Be True

This is a case I covered in How Good a Deal Can You Ethically Accept. When you know a deal is only due to cashier error, computer glitch, etc., you may only be able to accept so much of a discount before you start to feel guilty.

What other examples of non-deals have you encountered?

Saturday, May 23rd, 2009 at 6:59 am

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