Volta Torrey writes, "How about enlisting in the Giant Food Stores war against coupons?
"The post's story about it listed the principal objections to coupons: discrimination, misleading savings, and handling costs.
"I'm against them for other reasons. It's too much trouble to clip, sort and carry them around. And just think how much shorter the line at the checkout courters would be if cashiers didn't have to fuss with coupons."
Volta, you are asking me to enlist in my own campaign. I have opposed merchandising gimmicks for decades.
I was against green stamps and yellow stams and all the other colors that were offered to make us think we were getting something "free."
I campaigned against "free" games. I campaigned against "free" rebates from manufacturers. I campaigned against "free" sweepstakes.
In each case, I insisted there's no such thing as a free lunch. Somewhere down the line, the public pays for everything it is offered "free."
As a matter of fact, the public pays more because of these so-called gifts than it would otherwise pay if manufacturers and merchants just cut out the baloney and competed among themselves on the basis of quality, service, convenience and price.
The usual justification given for offering "free" inducements is that this builds a volume of business that creates such great economies of manufacture and distribution that the slight cost of the freebie can easily be absorbed, and prices to the public can actually be lowered, not raised.
I challenge any manufacturer or retailer to prove this true. It is my contention that if hundreds of millions of dollars are given away "free" and hundreds of millions more must be spent to process coupons and manufacturers' rebates, and if all the big operators in the field use the same kinds of merchandising gimmicks, two results will be inevitable: Retail prices will have to be raised to cover these enormous costs; and no manufacturer or retailer will gain an appreciable advantage over others because all will be using the same gimmicks.
The first to resort to gimmickry is usually a manufacturer or retailer whose business has been diminishing. He thinks he can lure back the customers he has lost.
He doesn't stop to think that his competitors, whose business is good, can easily outgimmick a firm whose capital is limited because its business has been going downhill.
Profitable firms can offer twice what he offers and, in that kind of confrontation, knock his brains out.
If he really has any brains, he will realize that he lost his customers in the first place because he was doing something wrong. He'll begin searching for better ways to serve the public instead of tricky ways to create the illusion that he's giving away something for nothing.
I thank Giant for having had the courage to discontinue Top Value stamps. I thank Giant for having the courage now to admit that coupons and rebates are costs of doing business that must be added to retail prices.
I hope that when coupons and rebates go out of style we won't be stupid enough to bring back stamps and games. I hope the savings will really be passed along to the public.
If an item sells for $1 but 20-cents coupons are freely available, it's true selling price is 80 cents. If the elimination of coupons and rebates results in an immediate drop in price to 80 cents or less, we can judge the manufacturer and retailer as having acted honestly. But if the price without coupons is 81 or more cents, we've been had. It's as simple as that.
However, our judgment at the moment coupons are dropped will not necessarily be valid for pricing schedules that prevail a year later. At that point, continuing inflation may make it necessary for the 80-cent item to sell for $1, or ever $1.20. Or it may be that a deepening depression will have brought down the costs of raw materials and labor so greatly that the item can be sold profitably at 60 cents or less. Our than-and-now comparisons should not cover too long a time span.
The public is seldom in a position to know precisely what is a "fair" retail price on any product. There are too many factors in the equation and too many bookkeeping decisions -- such as the Bell System's allocation of operating costs between local and long distance service, or how much of an airplane plant's overhead should be allocated to its work for the defense Department and how much to its civilian sales.
But if manufacturers and retailers stop adding a free slice of baloney to every sale they make, we'll all be better off.
There will be room in advertisements for the seller to tell us about his product, its quality and its price instead of how much we can "save" off a price that was arbitrarily inflated to begin with.