Fairness isn’t always on the menu
Institutions might be “too big to fail” but can still fail us
Recently I visited two Starbucks, and had the oddest of experiences. In both cases I ordered a large cup of coffee, and to my astonishment was told that they didn’t have any coffee. It’s a coffee shop. At the first one the clerk informed me of the situation, and seeing the look on my face just said, “We’re out.”
A manager came to her rescue and suggested an alternative, an Americano, which, I discovered, features shots of espresso and filtered hot water. They had plenty of espresso, but no Freshly Brewed Coffee which was listed on the menu. It struck me that the Americano is a slightly pejorative name for a drink, hinting that they have it only for the uneducated palates of Americans, like me, who don’t appreciate the finer points of espresso or, indeed, lattes.
Around the same time I took a road trip and, to keep time, I decided to grab a burger at the Carl’s Jr. next door to a roadside gas station. After perusing the extensive menu and not finding just a hamburger, I asked the clerk, “Don’t you just have a hamburger?” “Oh, yeah,” he said. “It’s not on the menu, but I can get you just a burger.” It’s a burger joint. On the Carl’s Jr. website the menu does feature “The Single All-Natural Burger,” but at this particular shop it’s not on the menu.
I see this all the time with automobiles in my life as a car reviewer: On TV they advertise such-and-such a vehicle at $34,995 or $17,995, but always with a little asterisk for “base price” and a parenthetical “Vehicle shown is $43,500” or “… $21,495.” You can get a base-price vehicle, but only if you order it and wait. The come-on pricing is not on the standard menu.
It’s all a part of the “up-sell,” a time-honored business practice to try and squeeze more revenue – and profit – out of each and every sale. There’s really nothing wrong with that, as long as the process is transparent and the customer is willing. We’ve all been subject to the sales pitch with any number of retailers, car dealers, stock brokers, real estate agents, plumbers, and on and on. We get that. Heck, many of us, myself included, have been those salespeople engaging in up-sell; the truth is that the very best salespeople are masters of the up-sell, and they quite rightly win awards – and extra compensation – for that talent.
And often that initiative is pushed by sales “goals,” or to put it more bluntly sales “quotas.” When you combine incentives – quotas, the stick, with extra compensation/bonuses, the carrot – it means we work harder, hone our pitching skills, put in more hours, and make more sales calls. As noted, this is all time-honored business practice.
If it’s fair and transparent. That isn’t always the case, as the recent scandal at Wells Fargo bank so clearly points out. The bank was busted for, and admitted to, creating phantom bank, credit and debit accounts in a cutthroat sales quota scheme designed to wring millions of dollars in extra fees from unsuspecting customers.
If you look back 10 years or so, you saw similarly unfair and non-transparent practices in the mortgage banking and real estate appraisal industries that pushed consumers beyond their means, also in the name of inflated fees. That the perpetrators (perp-e-traitors?!?) eventually got caught is axiomatic; how they ever thought they’d get away with it should result in naming them Darwin Award winners.
Unfortunately, the most egregious perps – the very senior management now at Wells Fargo and back then at firms like Countrywide Financial – always make out like the bandits they are with unbelievable bonuses and golden parachutes. Sometimes it is said that these institutions are “too big to fail,” but clearly they are not too big to fail us.
Not having just coffee at a coffee shop or just a burger at a burger joint is no crime, of course; it is, however, most assuredly short sighted. We should never forget where we came from.
Too bad in banking those roots are often obscured.
Fairness isn’t always on the menu.