All too often shoppers are baited with “savings.” Sometimes these so-called savings are even “instant,” whatever that means. I’m guessing it means not having to navigate the hell of redeeming rebates? Rebates belong right up there with gift cards as horrible consumer finance inventions, but I digress. Such offers of “savings” concern me, so let me get up on my soapbox. BTW I own several soapboxes, custom-made to handle extended use.

Apparently the idea is that these savings are supposed to make us feel like the savvy shoppers we aren’t. “Look honey, I just saved $100 on XXX,” or, “Come into store YYY and save 50% on ZZZ,” to which I always feel compelled to say, “But stay OUT of store YYY and save 100%.” Sometimes I wish I had my own radio show.

Although technically savings, the savings accrued during shopping are not like savings in the bank. The reason is that there is no associated cash flow. In fact they often require a negative cash flow, and negative cash flows don’t impress me at all. Spending $7 to “save” $3 does not make economic sense. Pricing something at $10 and immediately discounting it and selling it at $7 is an accounting gimmick. I understand that companies report a $10 revenue and a $3 cost of sales in this case, while the customers report a cost of $7 with $3 in savings. This serves no purpose other than to make everybody feel smarter about their economic choices.

It is my sincere wish that companies would stop trying to deceive me about how much I save when I buy something, when the item is on perpetual sale at a price comparable to other stores. To the folks at Safeway, Martins, etc. who probably have no choice, please stop telling me how much I saved when I just handed you my money. The problem is that companies are trying to create a fake anchor point that is also known as the MRSP—minimum recommended selling price. I have never come across something that doesn’t sell below this “minimum.” Instead, I use JMPC—Jacob’s maximum price ceiling—which is very close to the lowest price I have ever seen advertised. Because of technology and other efficiencies, prices should generally go down; if they don’t, I wait. Fictitious savings are not a selling point in my world. I know what something is worth, and made up savings are worth nothing.

Originally posted 2007-12-27 16:32:00.