Bad Idea

A store in Australia has decided to charge a $5 dollar browsing fee, refundable upon making a purchase. This is an awesomely bad idea. How on earth would you enforce it? Prevent a customer from leaving the store until he paid? And what kind of message does that send to potential customers? Don’t shop there, because if you decide you don’t want to buy that day they’ll charge you for your time?

I’m reminded of a sign I saw in a store in my town, asking customers not to use credit cards unless they really needed to, because of the extra expense for the store. Fair enough, particular as most customers are probably unaware of the fees imposed on shopkeepers. But the sign continued on to say something like, “we provide credit card purchases only as a customer service, and we don’t have to allow it.” Technically true, but as Adam Smith pointed out, it’s not from the benevolence of the brewer that we get our beer. Likewise, allowing credit card purchases is also not a benevolent act. I encourage the store owner to really act on his threat and find out just where the line between benevolence and self-interest lies. Either that or stop writing signs that both insult your customers and pose threats you’re not willing to carry out.

Here’s the Australian store’s sign.
5-just-looking-fee

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About James Hanley

James Hanley is Associate Professor of Political Science at Adrian College and a Fellow of the Institute for Social Policy and Understanding. The views expressed here do not reflect the views of either organization.
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9 Responses to Bad Idea

  1. Murali says:

    The university co-op (basically a bookstore) demands cash payment for purchaces totalling less than $10. Of course, they have a sort of captured customer base. People buying things at the coop are extremely unlikely to go elsewhere just because they make the experience less pleasant. If we are there, it is because we need something urgently. Or something only they have.

  2. James Hanley says:

    I’ve seen other stores do that. I don’t think that’s necessarily a bad idea, as long as it doesn’t lose you customers. I’ve also seen a lot of stores that ask you, when you use your debit card, to punch in the PIN, so that it actually gets recorded as a debit transaction rather than a credit transaction. I don’t think that’s bad, either, and I’ve developed the practice of usually making sure I do it that way with local businesses because it’s good for them without imposing any real costs on me.

  3. Matty says:

    I once went into a small newsagents where the proprietor obviously had some problem with browsing. I’d spent about 30 seconds looking along a rack of magazines when he shouted “For God’s sake buy something”. Of course I left immediately, if you shout at me you don’t get my money but I’ve often wondered what was going on. Did he just have a twisted view of how sales works or was there some emotional problem.

    I’m curious about the last line that “This policy is in line with many other..stores”, does anyone know if this is true? The article does cite a wedding dress store that charges for fitting but that doesn’t strike me as the same thing at all, most people would understand that 90 minutes exclusive attention from a fitter is a service you can be charged for in a way they would not appreciate a just looking fee.

  4. James Hanley says:

    I’m reminded of a word of wisdom from a friend of a friend: “You’re always selling something,” meaning that whatever you happen to be doing at the moment, you’re trying to sell people on agreement to something. In the store, that means you’re not just selling when people bring something to the counter to purchase–you have to sell them on wanting to be in there so you have a chance to sell them on the actual purchase. There’s a yard equipment repair shop in our town–the only one–where the well-known people are greeted as friends, and folks like me are greeted with “what do you want?” in a way that always makes me feel like I’m impinging on their time. After a few times of that, I decided I’d rather drive the 15 miles to the next closest competitor. Who knows, maybe they’ll actually be happier without me bothering them.

  5. Dr X says:

    I get where they’re coming from. Best Buy is in seriousl trouble because people use it as a showroom to make a choice on a product they will order elsewhere, but I can’t imagine ever paying a toll to enter Best Buy. I do make purchases there (the IPad I’m using right now), but that would stop if they charged for entry to be credited only to purchases.

    Just as the music, film, newspapers and the book industries have struggled, some bricks and mortar enterprises are going to struggle with a model that works, but I can’t see this browsing fee model work.

    Matty,

    Glad to hear you left that newsstand. sheesh! What a way treat customers.

  6. Scott Hanley says:

    Reminds me of Vargo’s bookstore in Bozeman, MT, which used to be plastered with signs saying “If it’s good enough to read, it’s good enough to buy” and similar sentiments. In those days, it was almost impossible to get me to dislike a bookstore, but they managed to do it and certainly got fewer of my dollars than any other bookseller in town.

  7. lancifer666 says:

    Matty,

    Our local liquor store has a rack of “gentlemen’s” magazines. They are all sealed in plastic now (Indiana state law? product tampering prevention?) but they used to be open.

    I’m sure they wanted to yell at “browsers” but instead they installed a “shot clock”. It had a motion detector and if you got close enough a 1:00 min LED timer would begin counting down and then buzz at 0:00.

    I loved it! It was fun to see the faces of people when the buzzer would go off and everybody in the store would look over at them. It was also a good conversation piece for the store. I don’t know if it increased sales of skin mags but I missed it when it was gone.

  8. James Hanley says:

    But how’s a guy supposed to make up his mind that fast?

  9. pierrecorneille says:

    It seems like a bad idea to me, too. I suppose they could “enforce” it by charging people admittance and then, as the sign says, deducting it from customers’ purchases.

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