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The Almighty Buck Businesses

How the Quakers Became Unlikely Economic Innovators by Inventing the Price Tag (aeon.co) 233

Belying its simplicity and ubiquity, the price tag is a surprisingly recent economic development, Aeon magazine writes. For centuries, haggling was the norm, ultimately developing into a system that required clerks and shopkeepers to train as negotiators. In the mid-19th century, however, Quakers in the US began to believe that charging people different amounts for the same item was immoral, so they started using price tags at their stores to counter the ills of haggling. And, as this short video from NPR's Planet Money explains, by taking a moral stand, the Quakers inadvertently revealed an inefficiency in the old economic system and became improbable pricing pioneers, changing commerce and history with one simple innovation.
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How the Quakers Became Unlikely Economic Innovators by Inventing the Price Tag

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  • Who were those who invented the ".99" marketing gimmick? I don't recall...

    • Who were those who invented the ".99" marketing gimmick? I don't recall...

      Even worse, how about how the price of a gallon of gas always ends in .9 cents? They’ve been doing that forever...

    • by grumling ( 94709 )

      Perhaps if Radio Shack had priced everything $.99 instead of $.95 they'd still be in business today.

    • I expect it had multiple inventors.
      Because people look at the highest order of magnitude in the price, then going further down they will use more rational comparisons to justify the price vs what you get.

      The gasoline station. are the worse with 9/10th of a cent in their price.

  • America first? (Score:5, Interesting)

    by Anne Thwacks ( 531696 ) on Sunday April 15, 2018 @02:25PM (#56442205)
    I went to a Quaker school in the UK.

    What the Quakers actually said was "my price is the same for any man, be he a pauper or a king".

    I was taught that the Quakers started doing this in the early 1700's here (UK). My school was founded in 1703.

    I was never convinced about the morality though. I have lived in countries where they still haggle. I bought coffee and milk from the same person nearly every day for six months, and I am pretty sure I never paid the same amount twice. Its not just about how well the customer is, or otherwise - its also about how keen the seller is to get money quick. If you are really poor, you still may get the seller to sell at a loss, rather than carry their wares home after closing time, especially if the goods are perishable. (Also true in London markets today). In the 1700's most people self employed, and were able to control their own destiny more than employees can (if you were an employee, you were not in a good position at all).

    But the video is correct, in a big store, fixed prices are definitely an advantage.

    And haggling school? well just try taking a taxi in any third world country - you either get it pretty quickly, or you will go broke! However, in the spirit of equality, Uber is bringing the Third world to everyone, everywhere.

    • Re:America first? (Score:5, Insightful)

      by LaughingRadish ( 2694765 ) on Sunday April 15, 2018 @02:53PM (#56442345) Journal

      Except that you can't haggle over the price of an Uber ride and that both the driver and the rider get shafted.

      • If you honestly feel like you're getting "shafted" when you take an Uber, don't. Ride a bicycle, walk, take the bus, drive your own car, or call a taxi.

        "But those aren't convenient!" Well, duh. That's why Uber is popular and why they charge the fare they do.

    • Anyone in the US who even knows who the Quakers were/are knows that William Penn, the founder of the colony of Pennsylvania, brought the religion over from England. His was the first colony to practice freedom of religion. Most Americans don't know anything about Quakers past the oatmeal and oil companies named after them.
    • These are good points, and I have some experience with haggling in foreign countries. It usually works well enough, and in some ways better as you note.

      But observe that even under fixed pricing some these flexibilities of haggling are still not unusual especially when dealing directly with the individual store owner. I am sure we have all had experiences with owners offering to knock something off the price for various reasons, offering informal deals in the spot and the like.

      I posted above about the specia

      • No, that is not the case. While haggling, the buyer is saying what he would like to pay, and the seller what he would like to receive. There is no implication that they expect it.

        As to literacy, the Quakers and Anglicans would have been fairly literate, but the rest of the population was not, both in the UK and US. That probably did allow Quakers to use Excel spread sheets to set their pricing ;-)

  • by 140Mandak262Jamuna ( 970587 ) on Sunday April 15, 2018 @02:44PM (#56442287) Journal
    Even with rudimentary purchase history and correlation, Target was able to know whe.n the girl was pregnant before her dad. With the comprehensive tracking and combining purchase histories of goods, services, travel they can predict a lot more. Even the plain address reveals so much, 3.1 person household, 16.2 years of education, 2.7 cars, mean income 85K, std dev 15K etc.

    Combine it all the stores will know precisely how much they can charge you, and how much you can be forced to pay.

    If Quakers thought it is immoral to charge different people different prices, model corporations think it is their primary mission to charge based on the customers' ability to pay, not based on reasonable profits.

    • If Quakers thought it is immoral to charge different people different prices, model corporations think it is their primary mission to charge based on the customers' ability to pay, not based on reasonable profits.

      And strangely, the consumers also think their primary mission is to pay as little as possible, not enough to give the seller "reasonable profits".

      We still haggle, basically; we just do it in much slower speed.

  • And then Amazon happened, where prices change depending on who is viewing the item.

  • These days, the price on the tag isn't the price. For many buyers, it's a starting point for negotiations because they think that the item in question isn't worth what's written on the tag. Of course, for the seller, it's also become a way for them to basically say that whatever they're selling is worth far more than it really is. But it doesn't stop there. Because there are legions of people who have no ability to create a product let alone a desirable one, they end up joining the ranks of bureaucracy

  • Stay on a page at HobbyKing for awhile and they'll pop up a discount. "we see you've been here awhile how about 5% off?..."
  • Double Glazing sales (Score:4, Interesting)

    by iTrawl ( 4142459 ) on Sunday April 15, 2018 @03:40PM (#56442559)

    The Double Glazing sales industry (in the UK) brought haggling back with vengeance. They insist that can't give you a quote without sending a sales guy into your home because apparently you're unable to take half assed measurements at the same level as that the sales person who does the same and says a surveyor will have to come and measure things precisely anyway. And once in, they pull discounts out of their butts, and if you send them off they'll call you with even more discounts on top of "those are all the discounts available mate" that you got already.

    In my specific case, the list price went down from 9K to 3K after all the discounts and a customer retention discount (i.e. I canceled on them shortly after taking their offer). How is that even possible?!

    • Re: (Score:3, Funny)

      by Anonymous Coward

      I had no idea doughnuts were that expensive in the UK!

    • by Nethead ( 1563 )

      Same thing over on this side of the pond. Having both bought and sold windows back in the day, I have to say it's worse than buying a new car. When going through my one week sales training where we learned to rape^H^H^H^H serve our customers, I found out that we start at three times the price that we will actually agree to.

      But you see, these were special windows. They were TRIPLE glazed, with krypton gas! (To be honest, they were sweet windows, often with a better R-value than the wall they were install

    • by AmiMoJo ( 196126 )

      The problem is that the discounts are often give by cutting corners. I know people who have windows sagging at the top because the window frame wasn't properly re-enforced or whatever. The windows themselves are cheap crap, the struts are bent and broken, and the only possible maintenance is to rip them out and replace.

      No-one ever haggles for a 20 year warranty, or even believes that the cowboys who did the work will still be around then.

    • On that subject specifically, I've had a similar experience. We had a regular builder quote too, and he quoted what we ended up paying with one of the 'specialist companies'. At the time we thought his quote was way too cheap and were (erroneously) worried about the Fensa certificate and whatnot from him, so discarded him from our decisions.

      In short - this seems to be a phenomenon of the 'big' double glazing vendors. The rest of the country has pretty much ignored it and carries on regardless. In hindsight,

  • aka price negotiation. It simply moves it between sellers, instead of within a seller. That is, each buyer gets the same price from a particular seller, but different sellers can have different prices. Thus the market requirement for price negotiation is preserved.

    It's worth noting that the equivalent of haggling is also creeping back into online stores, where merchants will charge different prices to different customers to help them better gauge how close they are to the true market price. Contrary
    • Profit is maximized at the market price.

      If I could sell the same volume at twice the market price I wouldn't make more money? Of course, if I'm a big enough seller then my price *is* the market price, or a big influence on it.

      If your prices are lower than market price, your sales are increased but the lower profit per item results in a net profit decrease.

      Not necessarily. It depends mainly on the elasticity. If dropping the price by 5% means you shift 10% more units you're ahead.

    • by amorsen ( 7485 )

      Profit is maximized at the market price assuming most customers are close to perfectly informed, and the fairness of single prices saving the few uninformed customers from being screwed over.

      Since profit at market price is not really something that most companies find reasonable, they focus on minimizing customer information and charge the highest prices to the least informed customers. This is particularly evident in strictly financial companies that do not actually offer a tangible product, such as insura

  • For inexpensive or necessary things there are price tags. No one wants to haggle over the 5c gum.
    However, once the price goes up .. or it is a leisure item haggling is back on the radar, or dynamic pricing
    That includes:
    Travel (Airfare, cruises, hotels)
    Cars (fixed price hahahahhaha)
    Houses (never saw a price tag affixed to a house)
    Jewelry (not at Target)
    Appliances
    and the list goes on ... clearly the NPR person just has someone else do the shopping for them ... or believes that applian
  • if I were ever to become a church-going man, I do believe I'd have to be a Quaker.
    From being probably the first church to oppose slavery, embrace modesty and humility as core tenets of their faith, giving equal voices to women, praying at the funeral of the mass-murderer who targeted their church and killed many kids (I could NEVER be that good, though I do yearn to be...) they have demonstrated what I consider to the "best of faith".
    A far cry from the Televangelist assholes who seem to dominate here in
  • Unreal Tournament is for pussies.

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