Breakage

July 11, 2017

I first heard the term “breakage” when learning about betting on horses.  Breakage is the rounding down (never up) of payoffs to the nearest nickel, dime, quarter or dollar, ostensibly to eliminate the need for mutuel clerks to handle pennies or other small change.  Breakage also helps fund “minus pools” in which the net amount bet on losers does not cover the legally mandated minimum payout of $2.10 on a winning $2.00 bet.  However, breakage really is a surcharge on almost every winning bet a horse player makes, especially when the rounding down is to an amount greater than a nickel, or when it is imposed on non-cash betting accounts.

In the casino gambling industry, the term is used to describe when an establishment does not have to give something a patron has been offered or is entitled to, as explained in this post.  Casinos want to appear generous in extending offers to potential patrons, but don’t necessarily want to incur the costs of fulfillment to everyone who shows up to take advantage.

Breakage also occurs in the commercial world.  I have written about several varieties, such as the gas discount that may be used only once for up to 20 gallons, when most people’s cars have tanks that don’t hold that much, and coupons that, in large type, purport to apply to any item in the store; the small-type exclusions (which always seem to apply to the item you intend to purchase) are not apparent until after you’ve traveled to the store and been told the bad news at the check out counter.

I don’t understand how merchants believe that losing a customer who feels misled by an offer (even if, when carefully read, the offer fairly represents its terms) is worth the savings it can realize in terms of breakage.  I prefer giving my business to businesses that are forthright in their communications with customers and don’t play “gotcha.”

 

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Design

July 11, 2017

Good design is something we all crave in consumer products.  In my experience, manufacturers seldom deliver.  In many cases, the lack of good design is shocking — if anyone actually used the product for any time before putting it in production,  its design would have been changed.  Two examples of this appeared shortly after I bought a new car.  While I generally am pleased with the vehicle, two features, each very obvious to me after a few short drives, make me want to scream.  The first is the ornamental chrome-like trim on the dashboard air vent to the left of the steering wheel.  This metal reflects in a glaring way in the outside rear view mirror and is a constant annoyance.  Interestingly, my father’s car, from a different manufacturer, exhibits the same problem.  A more serious design flaw is presented by the control for the instrument panel lights — a thin, plastic stalk that sticks out of the instrument panel that is twisted to control the brightness of the instrument back lights.  Aside from the fact that the stalk is flimsy and likely to break, it presents a safety hazard when accessed while driving, because accessing it requires the driver to reach through the steering wheel with one hand.

Other design elements that are bad for the consumer are deliberate.  In my limited experience, Apple, whatever the other merits of its products, is a master at this — so much so, that when other companies see what it gets away with, they emulate it. The lack of a memory card slot on its phones and tablets (before any claim at water resistance, which might have justified its omission), as well as the lack of a user-replaceable battery put me off Apple products when I was looking to buy my first smart phone and tablet.  I simply did not want to pay five times the cost of a standard memory card for the same storage that had to be built into the phone, or pay the Apple store a hundred dollars to replace a fifteen dollar battery.  The recent elimination of the headphone jack on some products, to force the user to purchase a dongle or bluetooth ear pieces, is the same type of deliberate anti-consumer planned obsolescence design. Another is the changing of the jack for the charging cable that forces a consumer to buy all new cables each time he or she buys a new model Apple phone. In the biopic about Steve Jobs, a scene that resonated with me was the launch of a new Apple computer.  When the machine wouldn’t work seconds before the public unveiling, the poor guy who tried to fix it found that Jobs had used screws that prevented the opening of the computer with a standard screw driver.