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I realize the article mentions that sometimes happens, with their example being a 0.8oz deodorant. But as a frequent shopper it isn't my general experience. I o
by kcorbitt 5y ago
I realize the article mentions that sometimes happens, with their example being a 0.8oz deodorant. But as a frequent shopper it isn't my general experience. I often compare prices and on a unit cost basis (so controlling for the sometimes smaller dollar store quantities) you can almost always buy the same brand from a dollar store for a steep discount compared to a traditional supermarket or Target.
In general I feel like there's a tendency to view products marketed at poor people as exploitative. That's sometimes merited (payday loans!) but honestly, dollar stores are really effective at providing a good product at a great price.
- gambiting 5y ago>>That's sometimes merited (payday loans!) That's also a very interesting discussion to have because from what I understand, payday loans businesses exist because the alternative is worse - people who are desperate will always borrow money from someone, so it's better that they borrow from a well regulated business rather than from the "pay or we'll break your legs" kind. And then the 1000% APR is argued that it's the actual cost of risk with these loans since they default so often.
- fennecfoxen 5y agoAt some point APRs really stop making sense for two-week loans. It's easier to understand what people pay in three parts: processing costs, a risk premium, and the lender's margin. Fordham Journal of Corporate & Financial Law estimated the margin at 3.75%. The argument against payday lenders is a paternalistic one with moralistic overtones, with all the potential flaws that might entail.
- deleted 5y ago[deleted]
- pnutjam 5y agoEver had a payday loan? I'm guessing no.
- fennecfoxen 5y agoi'm unsure why this would make APR a better tool to understand two-week loans, or how it would make things less paternalistic
- pnutjam 5y agoThe process is pretty demeaning and profits are higher then you think. The lenders dilute the profits by opening stores all over the place. It's a competitive industry. APR is the accepted measure for loans, why should they break the standard and get special treatment?
- 41209 5y agoThe worse alternative is sleeping on the streets when you can't pay your rent. While I do think payday loans are evil, I recognize why they exist. I would prefer a much more robust housing support system for lower income people. Almost all of society's problems could be fixed with more affordable housing. For example let's say you have abusive parents, if affordable housing exist the moment you turn 18 you can up and leave. But now you have bizarro programs which will stop you from attending college if you get "affordable housing"( government subsidized). When I was young I was able to find a $600 apartment, on the free market. Now the same place is 1200$. On the other hand, rent-a-centers are disgusting. I remember when I was a kid I had calculated they wanted me to pay something like $3,000 for a $500 laptop. But the idea is you only need to give them $50 a week. I went and saved my money and found the absolute cheapest laptop I could, paying cash for it. On a larger level, car loans are also extremely exploitive. No one needs a car which cost more than $20,000, but all these shiny ads show girls will swoon over you, men will respect you, as long as you buy a car which is $75,000 + tax and destination.
- PaulHoule 5y agoDepends. I got a car loan for a modest car with 0.7% APR, I don’t see a problem with that. My mother-in-law leases a new Toyota Corolla every few years; she gets trouble-free motoring at a reasonable rate. Myself I have no idea how many miles I am going to drive next year (do I work from home? take the bus? do I drive to Montreal or North Carolina a lot?) so I buy a similar car and drive it into the ground. Many of those luxury cars are leased, not loaned; the headline number ($/month) looks low compared to a loan on a modest car. You will probably need a lot of warrantee repair (a Toyota and a Cadillac are quality cars in their own estimations, but not in each other’s; if you need your car to start in the morning so you can get to work pick the Toyota.)
- 41209 5y agoA Corolla is only $20,000, so that fits my point. But I have seen tons of people buying cars they can't afford, in order to impress people they don't like. The easiest way to waste tons of money is by buying an overpriced car
- d0100 5y agoDon't people in the US use credit cards? If you are going to payback the money on your next payday, why not just use the credit and pay it on your payday? Do stores not allow split payments?
- bradleyjg 5y agoPeople with bad/no credit can’t get credit cards (except secured cards, in which case you have to have the money upfront.) The Venn diagram between patrons of payday lenders and people with bad/no credit is a circle.
- dazc 5y agoAlso likely that such people who do have credit cards are already maxed-out to their limit and paying the monthly minimum?
- Falling3 5y ago> And then the 1000% APR is argued that it's the actual cost of risk with these loans since they default so often. Isn't that a bit of a self-fulfilling prophecy?
- gambiting 5y agoI imagine they aren't defaulting because of the interest though - more that the borrower didn't even have the ability to repay the original amount at all.
- Falling3 5y agoSome of them - sure. But anyone who would've been able to repay the loan at a reasonable interest rate is still going to have an extremely difficult time with these APRs.
- justinjlynn 5y ago> buy the same brand That doesn't mean they're the same product or quality, however.
- celticninja 5y agoI don't think a brand will change their recipe or reduce quality of components, when simply resizing is easier. If they wanted to do that then they would be better off creating a different lower cost brand, rather than a new manufacturing process for $ store items.
- lotsofpulp 5y agoBrands will offer a cheaper quality product with a slightly different model number in electronics though.
- celticninja 5y agoWorth it on higher end stuff not on $ store items.
- sfifs 5y agoThis isn't correct. Big brands virtually never skimp on product quality for smaller stores because it harms the long term equity and value. They customize quantity.
- raverbashing 5y agoThese products are so well optimized now they're mostly margin and packaging/shipping/handling cost. I doubt your toothpaste tube cost more than $0.50 in actual materials to make. And on a store this can go for $3? $4? (from a quick look in Amzn - approx values the cheapest one is $8 for 6)
- sfifs 5y agoCPG industry margins are quite public as almost big brands are owned by listed companies. They're not high. The highest margin categories for big retailers i believe tend to be clothing.
- celticninja 5y agoSimilarly in the UK, whilst there are certainly £1 store offerings from brand names which are smaller than their traditional supermarket offerings, the vast majority of products are end of line or bought up cheaply in bulk where they otherwise we're not selling. I have had success in the past finding items which I have resold on eBay for significantly more because their true value is higher.
- amcoastal 5y agoDefinitely! Dollar tree is the place to get things like dishes and cleaning supplies. You get the same bottle for $1 that is 1.88 at Walmart or whatever. I'll only buy things that the dollar store I KNOW are cheaper though, sometimes you'll think you're getting a deal and then the same product at Walmart is 90 cents.