JCL Blog

Paying for Things We Don't Need

I travel a fair amount and like anyone who encounters the TSA regularly, I have reduced the number of things I bring with me as much as possible. This has been a great exercise, because for a quick trip I just do not need much stuff. As a society, we probably need more constraints like this because we have gotten out of the habit of making well considered purchasing decisions.

One of the things I started leaving behind was shaving cream. I did not know if it was a liquid, and the can was clearly over 3 oz. Indstead I used plain soap from the hotel and for me it worked just fine. Soon I was not using shaving cream at home either. It had always bothered me that the company that made it was "innovating" by making it difficult to dispense just the amount of product that I needed. By some miracle of engineering the can always shot out about twice as much as I needed. Fortunately I don't need them at all now.

I was an early adopter of an IP phone service. I tried it out and it worked OK, but then the hardware failed - and well, we never cut over. After paying for the service even though we were not using it for several months, I called to cancel. The company charged me $35 just to cancel my account -- even though they could plainly see that I had no activity on my account. They got my $35 -- but I am no longer a customer.

Here are some other examples of commerce in our daily lives that may not be adding any value.

  • Retailers will sell you a warranty on just about anything -- and their business model is to fulfill as little on the warranties as possible.
  • Many health insurance companies deny every claim the first time around -- just to see how badly you want them to pay.
  • Stock brokers will charge you a fee for an account that goes unused.
  • A fairly high percentage of gift cards go unclaimed -- which is pure waste for the purchaser and pure profit for the seller.
How much of our GDP is based on waste like this?
As consumers we should think more about what we buy. As shareholders we should make sure we don't own shares in companies that have revenues earned this way.