There’s Probably No Hope for Consumers Who Aren’t Filthy Rich
by Joshua Michtom
My recent interactions with my former bank have prompted me to think about the feedback loop between consumers and the companies that squeeze profit from serve them. We like to think that when companies do something stupid or abusive, market competition will allow us to express our ire by taking our hard-earned dollars somewhere else. But what happens when that just doesn’t work? (Spoiler: it mostly never works. We just get screwed and keep coming back for more.)
As one commenter on my bank travails pointed out, “The sad fact is that for big banks, retail customers like you just aren’t worth the time and money. Even if you regularly kept a large balance and used the account daily, you’re just not who they want to do business with.” (In other words, staying with the break-up metaphor, ‘she’s just not that into you.’) I got that message loud and clear when the bank refused to pay me back the $35 bounced check fee I had to pay on account of the bank’s error, and didn’t even beg me to stay when I said I was taking my business elsewhere.
Something similar seems to be happening in the airline industry, if a recent New Yorker article on the design of first-class seats is to be believed:
Premium cabins contribute disproportionately to an airline’s economic performance — both directly, through higher ticket prices, and indirectly, by solidifying relationships with big-budget customers who fly all the time. Business class is especially valuable; first class can be problematic, because first-class ticket holders require extra pampering and won’t tolerate overbooking. Web sites like SeatGuru enable picky fliers to compare seats on many routes, and keeping such fliers loyal is expensive: new first-class seating units can cost more than half a million dollars each. Jami Counter, a senior director at TripAdvisor, which owns SeatGuru, told me, “The true international first-class cabin actually keeps shrinking, because the international business-class cabin has become such a great product, to the point where you’re differentiating more on things like food and service.” Because costs are high, passenger density is extremely important, especially outside first class.
In other words, fancy first-class seats are so profitable that airlines will keep packing the unwashed masses tighter and tighter in steerage economy class to add extra centimeters of Corinthian leather-upholstered luxury for the one percent. (Oh, and they’ll let boarding be slow and inefficient for the plebes so as to sell them preferential boarding privileges.)
In addition to the profit-motivated bad feedback loops, I’ve noticed another kind, which irritate me way more than they should: the situations where companies offer an inferior product or service, but the effect is so marginal and competition is so limited that consumers can’t or don’t bother to change their spending and the companies never get any feedback at all.
My favorite example of this is the resealable closures on consumer packaging. (I’m obsessed with this. It’s not healthy.) A few years ago, I noticed that suddenly, every bit of disposable packaging came with a built-in ziploc closure. You’ve surely seen this: it’s a plastic bag with a perforated strip, and when you take off the strip, there’s a zipper-type closure so that you can, theoretically, use some of the product and keep the rest fresh. I assume there was some industry-wide manufacturing innovation that made this kind of packaging much cheaper than it used to be, because it’s on lots of things that don’t even need to stay fresh, like coffee filters. And it’s not a bad idea! Recloseable packages are convenient. The problem is that the zipper closures are often too strong for the quality of the surrounding plastic, so when you try to open them again, the plastic rips, rendering the air-tight closure useless.
This irritates me, and because I am fundamentally a stubborn pain in the ass, I would like very much to use my principled consumer dollars to send a message (even a small one) to the companies that do it. I assume that switching to the useless recloseable packaging occasioned some marginal increase in cost to the consumer, and I want them to fix it so I can save one cent per purchase or whatever. But the grocery store near my house has exactly one brand of #4 cone-style coffee filters. (Actually, the grocery store nearest my house has zero brands of #4 cone-style filters. Also, they don’t have butter. But even the store that is relatively close and has butter only carries one brand of #4 cone-style filters.) So how can I convey my displeasure? Give up coffee? ARE YOU CRAZY?
And then there’s Amtrak. Let us put aside how Amtrak is losing lots of money every year, and take note only of how they do other stuff that just makes no sense. Matthew Yglesias has detailed how their boarding procedures are even more nonsensical than what the airlines do. But even the way they take your ticket is needlessly inefficient: you buy a ticket with your debit or credit card from an automated kiosk. You get on the train. The conductor tells you you have to sign the ticket in order for her to take it from you. Does the conductor have a pen? No she does not. Why do you have to sign a ticket that you bought with a debit card (which doesn’t require a signature)? I don’t know. No one knows (I have asked). It’s stupid. You don’t like it? Take your business to the competing intercity train company. Oh, right.
All of which is to say, there’s probably no hope for those of us who aren’t super rich. This is not news.
(Please enjoy Tennessee Ernie Ford’s great ode to the futility of working class existence while you use the comments section to share your favorite examples of irremediable commercial stupidity.)
Josh Michtom is a public defender in Hartford, Connecticut. He spends way too much of his spare time decorating his children’s school lunch bags.
Photo: Richard Moross