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Friday, November 27, 2015

Why Black Friday is a Complete Scam

[Source] Black Friday is a complete scam based around the manifestly provable hoax that consumers are getting huge discounts on products that would normally be more expensive at any other time of year.

In reality, stores enjoy higher profit margins during the holiday period because retailers artificially inflate prices of goods in the months before Black Friday in order to make the subsequent discounts look good in comparison.

As Bloomberg Businessweek reports, “Among the 15 largest U.S. retailers, operating margins in the holiday quarter last year (2013) were 11 percent, compared with 9 percent in the preceding nine months. Amid the year-end shopping frenzy, these companies padded their bottom lines, on average, by roughly one-quarter.”

As the Wall Street Journal highlights, the idea of Black Friday discounts is a complete hoax achieved via the process of price massaging throughout the rest of the year.

The scam also relies on shoppers impulse buying another product that has a 98 per cent mark up value. So even if the first item represents a genuine discount, the vastly inflated price of the impulse purchase more than makes up for it.

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