Robbing Peter to Pay... Peter

I recently received a big shiny $100 cheque from the provincial government. It's part of their
"climate action" scheme. I guess I'm supposed to use it to do something good for the environment.
Tomorrow, gas taxes go up 2.4 cents per litre for similar reasons (and to pay for these $100 cheques).

Governments do this all the time. Essentially: we'll take a bunch of money from you, then give some of it back (after covering administrative and bureaucratic costs of course).

I can sort of see the logic behind the program, since the people who drive least will benefit the most, and its the government's job to redistribute wealth. But it still seems convoluted (and more than a little unfair -- why pick on driving but not the thousand other ways that people hurt the environment?).

Businesses are just as bad.
It's not quite the same, but price promotions seem to follow the same kind of logic.

Rebates are the worst...
"We'll charge you more than we have to, then give you back a portion of it. Eventually."
(I'm still waiting for a TiVo rebate from last Christmas).

Tell you what, Mr. Shopkeeper: Instead of giving me $10 off and paying $5 towards the administration of the rebate program, just give me $15 off at the till.

I recognize the value of discounts, rebates, coupons, sales, etc. and have even used them in marketing programs that I've run. But they need to serve a purpose, or at least be special in some way. Use coupon codes to track which marketing initiatives have been effective... Hold a big, attention-grabbing, newsworthy sales event...

Just giving a discount to try to create the illusion that customers are getting a deal is extremely wasteful and inefficient.

Of course, everybody does it. It's the standard "marketing" solution for any company that needs to temporarily boost revenue.

But how long before consumers get tired of it and start to ignore it? Or worse, how long before people clue in and just wait for a price promotion, never buying anything at regular price?

Personally, when I see a big "Everything 50% off!" sign, my first thought is "They can afford to sell everything for half price, still make a profit, and cover the cost of all the promotional materials. I guess that means I'm paying way too much the rest of the time."

Wal-mart may be a big evil corporation, but one thing you have to give them credit for is that they simply charge low prices all the time. No gimmicks or temporary discounts (well, a few, but those aren't their main promotional message).