Can Anybody Explain Discounts to Me?

Whidbey2009 121I know what discounts are–I just don’t understand why they mean anything. Why don’t merchants that offer discounts just sell their wares or services for what they are worth?

It seems to me that if they can afford to sell something at a discount, then they are ripping off the people that buy those goods or services at full price.

Am I missing something here?

Keep in mind, I am well aware of the concept of “loss leader,” where something is sold at a loss in order to get everyone in the door so that they will hopefully buy the profitable stuff. But does anyone really think that the cost of that cheap item is not buried in the higher prices of the other stuff?

Some argue that it is the “perception of savings” that is what matters. In other words, “I know I am being conned, but I feel better while being conned.”

This topic came up recently on one of the home inspector forums as to how many inspectors give discounts for repeat customers, or veterans etc.

I said that I do not give discounts because I give the fairest price possible for the amount of work being performed. If I could afford to give a discount, I would feel like I ripped off the client the first time by charging them more than I needed to. I doubt that anyone that expects a discount expects the level of service or quality of service to change, so why would the cost change?

Doesn’t it make you wonder what things would actually cost if all items simply cost what they cost–without all the games? Of course then people would likely only buy stuff they need, and then where would the world be?!

It seems that much of the way the market place works is to induce people to buy things they don’t really need, and what better way than to con them with discounts. It matters little that the things they actually need cost more as a result.

For bargaining or discounts to work (as they have for as long as goods and services have been sold), things have to be over-priced to begin with.

Worse yet, the things that other people “actually need,” sometimes just to survive, cost more than they can afford because of the discounts for things that people don’t need.

Of course when one is about to run out of gas, don’t we will all look for the station with the cheapest gas–even if we have to waste gas finding it?  It has become almost second nature to look for the cheapest price.  I am just curious about all those “other costs.”

So I ask again, can anybody explain “discounts” to me?