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Jewish World Review
Dec. 19, 2005
/ 18 Kislev, 5766
‘Rate and switch’
By
Rabbi Dr. Asher Meir
The ethics of shopping around
http://www.JewishWorldReview.com |
Q. Can I get a salesman to teach me about a product
and then buy it cheaper from a discount store or the
internet?
A. This phenomenon, which NYT columnist David Pogue
recently called "Rate and Switch" (rate the item in
one store, switch to another) has been around for
decades. In my home town there was a small, upscale,
camera store. The owner was knowledgeable and patient,
and would often spend twenty minutes explaining to a
customer the arcane of light meters, coated-lenses,
and single lens reflex, only to have the customer
exploit that information and buy the item on the cheap
in Manhattan.
There is an obvious injustice in getting a valuable
education from one merchant which you then exploit to
get a good deal from another merchant. But it's
important not to jump to conclusions, because the
phenomenon is more complex than it may first seem.
One problem is that there has to be some limit to
customer loyalty. It's true that the full-service
salesman may spend twenty dollars worth of his time
explaining how the product works, but often he doesn't
charge twenty dollars more than the discount store,
but rather a hundred dollars more. Now it could be he
has to charge five times more to recoup the four
customers who defected, but the fact remain that it's
hard to demand that the customer who receives a
service from the retailer should be obligated to pay
any amount.
Another complexity is that the relationship between
specialty stores and discounters can sometimes be
parasitic, but in other cases it is symbiotic
(mutually beneficial). For one thing, stores are
desperate to get customers inside; many customers,
even if they don't have any particular loyalty, will
buy from the store they're in if only to save the time
and effort of shopping around.
Sometimes the websites create the interest that draw
people into stores. Going back to my suburban
experience, the Manhattan stores had huge ad spreads
which informed customers about the variety of cameras
they sold; many people probably learned about camera
availability and prices from the Sunday paper and then
bought locally.
And sometimes the effect can work backwards. Web sites
may invest huge sums in instructional interfaces which
are then exploited by stores. For example, my books
are sold on Amazon.com. Amazon provides a wealth of
useful features: if someone is examining a similar
book they may refer them to one of mine; surfers can
benefit from customer reviews; and so on. Probably
some readers find out about the books on Amazon and
afterwards buy them from a local bookseller to save on
shipping!
Also, retailers are not always on their own. Very
often manufacturers and distributors take steps to
help them. After all, they recognize the benefits of
having full-service retailers provide product
information. Some companies don't sell on the internet
at all, or they limit internet sales to certain
products and reserve others for full-service stores.
Let's recap the situation.
Deliberately taking advantage of a salesperson to get
price or product information with the primary
intention of buying somewhere else is certainly wrong.
In Jewish law, this transgresses the prohibition of
onaat devarim, causing needless anguish -- in this
case, taking advantage of the store's resources
without really giving them a fair chance to compete.
Even when you have an open mind, the fairest policy is
to be willing to pay a premium for good service. If
the premium demanded by a full-service store is
reasonable, them most customers will find that if they
account sincerely for the time and trouble of going
somewhere else for the item, as well as for the
confidence they will have buying from salesperson they
trust, they would be better off buying from the
salesperson. Remember that rewarding good service is
in everybody's interest. Just as you willingly pay a
fifteen percent tip to a waiter who provides decent
service in a restaurant, you should willingly pay a
reasonable premium for a salesperson who provides
service in a retail store.
At the same time, the retailers will have to find
their own solutions. Some full-service retailers will
lower prices; others may charge for instruction but
give a rebate for customers; some will stock only
unique items, and some may go out of business.
Salespeople will have to become expert in providing
selective information which won't give an advantage to
competitors.
This issue really exemplifies a common theme in the
Jewish Ethicist columns. Neither markets alone, nor
ethics alone, can create a fair economic system.
Markets can provide the basic engine, the "meat and
potatoes", of commerce, but a little bit of ethical
sensitivity provides just the seasoning necessary for
truly fair and mutually beneficial dealing.
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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan
administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology.
To comment or pose a question, please click here.
Previously:
My paycheck is late!
Should schools cater to an elite?
All's fair in love?
Comfort and Competition
Do I need the caller's permission to put a call on the speakerphone?
Overtime for lost time
Is it unethical to play suppliers against each other to get the lowest bid possible?
Do family members have precedence in charity allotments?
What the world of business can teach us about our annual process of repentance and renewal
Are religious leaders subject to criticism?
Vindictive Vendor: How can I punish an abusive competitor?
Blogging Ethics: Is the blogger responsible for defamatory posts?
© 2005, The Jewish Ethicist is produced by the JCT Center for Business Ethics
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