VincentT • Knoxville, United States • 11 hours ago
"This half witted excuse for a story needs a correction. The man is not seeking a class action lawsuit- His attorneys have decoided to try to milk the cow. His attorneys have made this clown see dollar signs in his eyes over what should in any event be ain small claims court. The other thing to consider here is the guy was flying just to get free booie he is redifining the definition of alky!!! LOLOL"
Alcohol: More expensive than flying.
How much is 45 drinks anyway? Like 200-250 dollars, if that? It mentions that there's "thousands" of these no-expiration date coupons floating around, and that probably constitutes a much larger sum of money, but how many statistical outliers can there be that hoard their coupons, much less intend to use them one day that the airlines need to raise a stink about the coupons specifically in order to save money?
Something's fishy, is what I'm trying to get at.
Real simple, if they honor his coupons, they have to honor all the other ones. They gave out hundreds of thousands over the years that are still out there.
Let's say "hundreds of thousands means 200,000, though it could easily be 3,4,5,6,7 hundred thousand. Let's say it's only 200,000 that are left. People save these things up like frequent flier miles, anyhow.... These things are worth $5 each
200,000 x 5 = $1,000,000....
For every 100,000 of these things out there, it's $500,000. There are hundreds of thousands of these things out there..... 
I suppose what I'm trying to say is that, the actual move to change the coupon policy has a dubious motive. There's alot of contradicting elements, and assumptions made not based in reality, or good sense.
If, hypothetically, the value of the coupon is less than that of a drink, and so customers are extracting value out of the airline company much greater than it costs to issue the coupons, and so each coupon redeemed is so-and-so net loss. This is the worst case scenario for the company, although it's hard to imagine how a single alcoholic beverage could be so expensive unless there were external factors seriously ratcheting up the price of alcohol. Most likely though, the price of the drink is only cutting into the profit from selling the plane ticket only slightly.
Under the old coupon policy, each coupon can theoretically remain in circulation forever. I suppose if you were an economist, and you modeled the outcome of this policy using Homo Economicus, where each coupon will be held onto and redeemed 100% of the time, you'd naturally deduce "OH NO! LOSING MONEY FOREVER!", and thus are given the impetus to enact the new coupon policy.
However, I can't help but see this as completely irrational. Irrational in the sense that it doesn't actually work towards the Airline Company's goal of making money. Why? Because the old coupon policy of having each voucher have no expiration date actually SAVES the company money. There are simple psychological forces guaranteeing this.
Now, who receives these coupons? Customers. Not just any customers though, they're given to customers that can obviously afford the "premium" that the airlines can give. Now, whether or not these customers are actually wealthy travelers or indifferent businessmen on the company's budget, the two demographics most likely to be purchasing this service, is of some importance because it lets us guess what they think about coupons and how they'll use them.
Now, coupons, and I've forgotten the correct economic term for this, are a tool to divide up their customer base, from people that are willing to pay more, to people that are are only inclined to pay as much as they absolutely have to. Either way, the coupon helps the airlines, because in the hands of a person willing to shell out more money for luxuries (the wealthy traveler), let's him get a free drink, and that might instigate him to purchase even more drinks or food items, turning a profit. In the hands of someone that has incentive to be more frugal (the businessman on a budget), it allows him to get a drink for free that won't be listed on any account of purchases, and the lack of expiration date allows him to save it for later.
Now, the clinching thing is the expiration date, and I really do mean it when having none whatsoever saves the company money. Even in the worst case where each drink is a net loss, it saves money. Why? Because the lack of expiration date removes pressure from the customer to redeem it.
With an expiration date, the customer is given a choice: redeem the coupon and receive the value of the drink, or don't and allow the coupon to become worthless at the end of the trip. Any person that cares at all about their alcoholic beverages will of course see the obvious incentive of redeeming it right away, and they'll accept their drink right then and there. That's what the expiration date does, it incentivizes the customer to do something within a time limit, and if that thing only has a positive outcome for the customer, even better for him.
With no expiration date, the incentive to redeem it right away isn't there and the customer can feel free to save it, and when it's saved, the company retains the value of the drink for that much longer, and while it's definitely true that that saving that value gives the company more spending power (however minute) to place into investments and increase income over the long term, there are much stronger forces at work here.
What I speak of is the fickle psychology that rules over people when it comes to actually saving things for later. While the coupons can theoretically remain in circulation forever, there's a very good chance they won't. Now, I've personally known people that save coupons and vouchers, and also hoarders that want to hold onto everything of value no matter how small, and trust me when I say that all but the most dedicated have self-defeating habits. What I mean by that is: people that save items for later, tend to forget to actually use them for later. It's like, if you've played Final Fantasy, you get elixirs you find in chests, but then you hold onto them and hold onto them and hold onto them... saving them for later because there are usually only so many in the game, and you don't want to waste a useful resource when you could save them for when the game gets REALLY hard... but then you beat the game, and you realize that you still have every single elixir you've ever found in your inventory. Now, you do get the person that can follow through on their saving and use the coupons for their intended purpose (the man in the article), but you would not believe how many of those coupons just get discarded long after the flight, by people who think to save it, but then realize it's just not worth hanging onto it... and then there's people who intend to use it on their next flight, but then just forget to bring along the little piece of paper, or just forget to use it. People lose the coupons, but they don't blame the company for it, and the company gets to keep the value of the drink that the coupon was worth, while also reaping the 'good will' that giving the coupon generated.
These factors work together to ensure that: With an expiration date, more coupons are being used than if there were no expiration date at all, and thus the company is losing more money than they have to.
The point of the article though, is something even more troubling, and that's the abuse of it's customer's 'good will' or the customer's general sentiment towards the company.
Now, while the addition of the expiration date is a bad move by itself, it could have been alleviated by adding the caveat that coupons already in circulation are still valid and can be used... and this saves money. Why? Because it saves the good will generated, and 5 dollars of good will is worth more than 5 actual dollars. What I mean by that is, by refusing the man with 45 coupons, they're severely damaging that customer's good will. The drink is only 5 measly dollars, but the customer feels as though he's just been betrayed. Now, when the customer now has the choice of airlines, is he going to choose the airline that gives out a single free drink for the flight, but very definitely doesn't care about him, or is he going to choose an airline that may not give a drink, but will get him to his location just as well, and may even treat him better? In my opinion, more people would pick the latter than you'd think, and what WAS a measly 5 dollars in cost prevention, is now 200 or more dollars that they're not getting, and is being given to a competitor.
It's for these reasons that the Airline in question is either enacting an extremely elaborate conspiracy that involves battering the trust of it's customers and throwing away money, or are actually just enormously stupid.
I, myself, am going to go with the latter.
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Topic: Chill and Relaxed Progressive Irritation and Annoyance Thread (Read 872314 times)