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Tuesday, September 4, 2012

How Inflation Ruins What A Dollar Buys...

My mother and her friends are complaining.  Complaining that most of everything they purchase - particularly "things" like household items - are basically junk.

By "junk" I mean they don't last.

Like a "high end" pair of socks I bought for jogging.  Ten years ago I bought the same brand - I got about nine years out of them.  Last year I bought the same brand - and got maybe a year, maybe less.

My mother tells the tale of purchasing an iron.  The idea she thought was that a "steam iron" when filled with water would produce steam to press her clothes.  Great - an idea that's been around for decades - except the steam iron doesn't steam.

She has gone from K-Mart to higher end stores and all the irons are basically the same.


As a child my mother was taught to spend money on quality items - buy something good and it will last.  She was born in the depression and this was common thinking.  In fact, its been common thinking right up to the last decade or two.

You saved your pennies to buy something that would last.

The other day a friend of mine was explaining how Sears had to change its return policy because people were buying lawnmowers in the spring and returning them in the fall for a full refund because they "didn't like the job they did."  Probably a ninety-day satisfaction guarantee or something like it.

So the model today is different.

You buy based on one thing only - the "return" policy.

You never intend to keep the "thing" for any period of time.  You simply expect to use it until it breaks and return it for a new one.

With a vast sea of unemployed people out there with nothing better to do with their time its little wonder.

So the industrial parameters for things have changed - changed form building a quality product to building the cheapest product you can that last until a few days beyond the return policy limits.

But that's not the end of the change.

Now return policies are changing as well, like with Sears.

People simply expect that a "big company" like Sears will give them what amounts to a free product to use.

After all, Sears must be "wealthy beyond imagination" so what's a new lawnmower?

People wonder why I buy a MacBook.

Its sooo expensive...!!

No, not when you look at the "total cost of ownership."

I have a relative that's the king of "returns."  But it takes a lot of time to do that - time to research the best warranties, to find the right retailer, to stand around in line or on the customer service phone for an hour while you fight with somebody over a $3 cable.

But my time is worth more than $3/hour.

I'd rather buy a $9 cable that lasts until the need for it is obsolete.  Then, over five years I save five hours of phone time - five hours of my time is worth more than $9.

So while some may wonder why I am buying such an "expensive" cable in fact I am saving money.

In retaliation retails staff the support lines with idiots who speak off of standard scripts:

"How are you doing today Mr. _____."

"I'm so sorry your ____ didn't work as you expected."

Blah blah blah blah...

Sure, this person is in fact really sorry - really sorry that your $10's spend on a whizler or whatever it is could have fed their family for a month.

Its a game of wearing you down. 

Will you put up with the first round or two of stupid suggestions and go away or will you reach the ultimate prize of a supervisor who actually knows and can do something.

Basically its call 1-800-CHINA or 1-800-INDIA if there's any problem.

My poor mother simply cannot deal with this.

And neither can I...

So I search around for quality products and buy them - spending what appears to be a lot of money but which, in actuality over the long haul, is far cheaper they buying junk.

This is tied, of course, to the fact that the US is inflating away the value of a dollar.

As your dollar becomes less valuable you have to purchase less with it in real terms.

But you don't want your customer to "feel bad" that the $1 pair of kids blue jeans you could buy in the 1959 dime store that lasted a generation through three more kids and a load of nieces and nephews costs $15 today (twice the inflation value) and will fall apart after a dozen washings.

This will continue until someone figures out that inflating the US dollar only makes this all worse.

(So don't plan on this changing any time soon...)

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