economics , humor , personal , social justice Saturday, February 14, 2015
No one ever said life was going to be fair, but I imagine that phrase was coined by someone making a lot of money by cheating people out of theirs. And this past weekend, if not for a little basic math, I might have been the sucker on that side of the equation which allows some kingpin product maker to lift my wallet while shaking my hand. No matter how many times you’re told to heed the advice “Buyer Beware”, you can’t help but feel the sting that “victim blaming” incites whenever you do fall prey to theft by deception. It’s absurd to think that getting scammed out of money has more to do with the consumer than it does with the integrity of the business who sells it. But that’s the American way; only by calling into question someone's "Americanness" and their subscription to capitalistic dogma that says "every man for himself", can one legally steal money from consumers.
This whole thing started during a routine visit to Petco for cat litter this past weekend. I’ve been potty trained for years, but I can’t say that same for every member of my household. Both Mizu and Madem require a box of granulated sand to take a dump in, and so, I yield to that need and buy it. But if you don’t have cats, you’d never know how expensive it is to contain and discard of their excrement. That’s why I was dually pissed when I encountered a marketing scheme by Fresh Step that bordered on the integrity of a local loan shark. Now, I'm all for "paying more for more value", but the problem facing consumers today seems to be "paying more for the ILLUSION of more value", or "paying MUCH more for the SAME or LESS value". It's important to note that the purpose of charging consumers more money for a product they are likely to buy anyway (a necessity as opposed to Prada bags), is that the product is significantly improved in a way that is instrumentally more efficient in its purpose. This means that updates for the sake of novelty don't justify an up-charge; you can't justify a price markup on Starbucks coffee simply because it’s now served in different color disposable cups.
This is precisely the case with the new "FRESH STEP LIGHTWEIGHT EXTREME”—a product so brazenly ridiculous that it begs the question:
At what point does cat litter become a novelty beyond just being sand for poop?
The new formula's apparent convenience to consumers is its significantly lighter weight. Being 30% lighter than the regular formula, Fresh Step claims that a 15.4-pound-box of the lightweight formula is AS effective as a 22-pound-bag of the regular "heavy" formula, and provides an easier experience with lifting and pouring. Considering I often buy the 42-pound-bag of regular "heavy" formula, I decided to compare the prices of each using the conversion printed on the "lightweight” formula box to assess whether a significant markup existed, if at all. What I found was absolutely astonishing.
When compared pound for pound using the conversion provided, for the exact same efficacy, the lightweight formula charges consumer's 55% MORE for what is essentially the same product! Check out the math:
FRESH STEP LIGHTWEIGHT “EXTREME”—(whatever that means…)
$12.99 for a 15.4-pound-box (equal to 22lbs of regular "heavy" formula)
To control for equal efficacy between the two formulas, I interpreted the pricing of the LIGHTWEIGHT formula for its suggested conversion to 22lbs of regular "heavy" formula.
Thus: $12.99 / 22 lbs = $0.59 per pound.
So, using the conversion rate provided on the box to control for efficacy, the consumer is paying 59¢ per pound.
FRESH STEP REGULAR "HEAVY" FORMULA
$15.99 for a 42-pound-bag
Using the 42-pound-bag of regular "heavy" formula, I used the same method to determine the price per pound.
Thus: $15.99 / 42 lbs = $0.38 per pound.
So, in the case of the regular "heavy" formula the consumer is paying 38¢ per pound.
To understand how much of an increase 59¢ is from 38¢, we need to go a step further by finding the difference and seeing what percentage that difference is of the original 38¢.
Thus: 0.59 — 0.38 = 0.21
So, 59¢ is a 21¢ increase in price for the same amount of cat litter when using the regular formula as the measurement for efficacy (as suggested by Fresh Step). To understand the percentage increase in price, we must compare this increase to the price per pound of the regular "heavy" formula cat, 38¢.
Thus: 0.21 / 0.38 = 0.5526 X 100 (percent) = 55.3%
In the end, accounting for the conversion in efficacy, pound for pound, the consumer is paying an increase of 55.3% in purchase price for a formula whose only benefit is that we can lift it with slightly less effort. Consider this: people pay more for a hybrid car because over the long haul it saves them time at the pump, money at the pump, and a boatload in taxes. A hybrid car that uses less gas isn’t a novelty—it’s an instrumental improvement on efficiency that literally saves consumers money and time. Making a pricey lightweight cat litter assumes that weight and pouring are BIG issues for people who buy toilet sand for their cats’ business. People buy cat litter for volume and its ability to mask odor. Cat litter doesn't go bad, so the more you can buy at a decent price, the better.
Perhaps the saddest part of this story is understanding that the predatory tactics once used for selling big ticket items—like a used car—are now being used to sell the most basic of products. Packaging bogus novelty updates as a genuine benefit to consumers is a shady way to do business. The result is a massive increase in profit for the same product dressed up in pretty colors and deceptive math. But the deception doesn't stop at the up-charge to consumers. Because shipping costs for litter are likely calculated in weight, a product 30% lighter is more of a benefit to Fresh Step than it is to consumers. The other cost-saving strategy presented as a plus for the consumer is the switch to a box. Traditionally packaged in high-end heavy duty plastic, switching to a recycled paper box also saves Fresh Step a bundle.
When added to the 55.3% up-charge in price, the cost savings of packing the lightweight litter in a cheaper box is explosive. Saving an average of 30% on shipping plus the 55.3% in added revenue means the Fresh Step stands to potentially increase total profit by a whopping 85.3%! Of course cost cutting doesn't NECESSARILY negatively impact the consumer in this case. However, the 55.3% up-charge to consumers is simply ludicrous.
Needless to say, I bought the original formula.