Friday, December 15, 2017

Wishy-Washy Thinking

Companies often destroy excess inventory for very good business reasons.

A recent article in Snopes highlights how some folks are weak thinkers.   The story in question is nothing new.   A young person decries a major store chain for destroying excess clothing inventory when "homeless people are freezing to death!"   Of course, some "homeless" people are less freezing than others, including the guy with no shoes, who has shoes - and an apartment - but begs with no shoes on, because it is good for business.

Like I said, the story is nothing new, as I recall reading a similar story a decade ago about a shoe company that slashed unsold shoes before throwing them in a dumpster.   "Homeless people could have used those shoes!" people cried.   And indeed they could have - by returning them for a full refund and then spending the money on drugs.

And that is the reality of it.   In the case of Eddie Bauer, they offer a lifetime warranty on their clothing.   Now suppose you fish a jacket out of the dumpster behind Eddie Bauer that is in perfect condition.   You've got a free jacket - for life - and you paid nothing for it.   Not only did Eddie Bauer not make any money on this deal, they lost money, as they paid to have the jacket made and shipped to the store, as well as paid for store overhead and employee salaries.

When you throw away "perfectly good" product, be it clothing, shoes, food, or whatever, people end up taking it and often trying to return it for a refund or store credit.   And since stores today have generous refund policies, one could empty a dumpster behind a Shoe-Max or whatever, and then walk into the store (or another branch) and demand a refund or store credit for 100 pairs of shoes.

Now, arguably, maybe there are other ways they could donate these clothes and avoid the return problem.   Removing the labels from the clothes might be one way - cutting off the neck tag and requiring the neck tag to be there for a refund to be given - is one way around it.   And donating clothing might give the company a tax write-off as well as favorable publicity, so it might be better than slashing and throwing in a dumpster.

But getting back to weak thinking, the young lady in the story decries this as an example of "the excesses of capitalism" - which I think was really more of her lament than she couldn't score free dumpster clothing.   But her thinking is flawed and weak in a number of ways.

To begin with, there is no clothing shortage in this country, even among the homeless.  Go to any Salvation Army, Goodwill, or other type of thrift store, and you will see racks and racks of clothing there at prices that are beyond cheap.   I go there all the time - the money they raise is used for charity, so you are doing good by saving money.

Have no money?  Most thrift stores will give you clothing and other things if you ask.   In fact, that is often their mission, to help the homeless, hungry, and whatnot.   As I have noted before, you really have to work at it, in this country, to be unclothed or malnourished.  We have so many programs available to help people.   You would have to intentionally not take advantage of them to starve.   As the "shoeless" man example illustrates, even a "homeless" man can get food stamps, a government stipend, and an apartment to live in.   Begging on the street provides him with extra cash, of course.

The reality of homelessness in America is that those folks living under the bridge and defecating on your lawn are not "poor" but mentally ill and drug addicts or alcoholics,  They don't need money, or shoes, or blankets or designer jackets, they need mental health facilities, drug rehab centers, and someone to manage their lives for them.   Since we choose not to do this for a number of reasons - the costs involved and our ideas about "freedom" (for some, not for the people cleaning up their messes, of course) we end up with homelessness.    Not long ago in this country, we had institutions to help the mentally ill.  Then we decided that cost too much and giving them pills was a better idea.   It did not end well.

The other side of the coin is, in a free country, people are free to do with their possessions as they wish.   If I want to buy 500 containers of cheaply made Chinese clothing and blankets and then put it all in a pile and set it on fire, that is my right to do so, provided I am not violating any environmental laws, of course.   It is a scary road we go down if some college kid gets to decide what people can and cannot do with their personal property - regardless if those people work for a corporation or are disposing of their personal trash.   It is not up to some college kid to judge the rest of us by what we throw away.

If we go down this road, it will only be a matter of time before the dumpster police start checking on what we are throwing away and whether we can or not.   And this is already starting to happen in this country, with recycling laws and deposit laws, and overseas.   In Paris, they passed a well-meaning but ill-informed law that restaurants cannot throw away food.  As a result, if you order a meal in Paris, and don't finish it, they hand the remains to you in a Styrofoam clamshell and make you take it home.   No homeless were fed, and now we have more landfill waste.   Great intentions lead to bad outcomes, in many cases.

Mark ran into this with the food store he ran.   As I noted in another posting, giving away the day-old bread has a lot of issues.   The shelters wanted a guaranteed delivery of X loaves of identical bread or pastries.   If a mixed-lot of items was sent, the "clients" of the shelter (homeless bums) would start a knife fight, because one bum got an apple danish, and the other got cheese.   Beggars can be choosers, in America!

The other problem, of course, was liability.   You give away food that is expired or about to expire, you run the risk of someone claiming food poisoning.   So you end up being sued for something that you were not only doing for free, but at a loss, when you consider all the manpower it takes to "give away" things.

And then there is the issue of homeless people lining up behind your store, expecting a handout.   If they handed out "leftover" food to homeless people in the neighborhood, you would end up with a homeless encampment next to the store - and homeless people sleeping in the parking garage, begging for money and harassing the customers.   Again, these are mostly mentally ill people or folks with drug habits, or both.   Not the sort of neighbors you want to have.   It is nice to be sympathetic to such folks, but self-preservation has a place as well.   Talk to anyone who works with the homeless and they will tell you they can be very dangerous.   This ain't a place for amateur hour.

But again, just as there is no clothing shortage in this country, there is hardly a food shortage either.  In fact, we are the most obese country on the planet, maybe outside of Tonga.   We have the fattest poor people in the world - and the fattest homeless as well.   And please, don't bore me with "well, they eat poor quality food!" arguments.   They eat, which is more than a poor person in Africa can expect.   We need to put our "problems" in perspective.

There are other reasons companies destroy products.   The French pottery company Quimper, makes a line of upscale unique pottery.  And outside of the factory, is an area where they smash the defective plates and bowls.   Smashing "perfectly good" china that could be used for the homeless to eat from!  Such a scandal!   But there is a method to this madness.   If they allowed "factory seconds" onto the marketplace, it would create the return problem that the shoe and clothing companies have.   People would return pieces for new ones, effectively getting a perfect product for the cost of a defective one.   And not only that, the "factory second" product would bring down the reputation of the primary product.   So, like most china producers, they smash the plates and bowls with minor defects in the glazing.

And in fact, every industry does this - the scrap rate in some production lines can be alarming.   For every LCD panel made, back in the day, maybe four or five had to be scrapped - which is why they were so expensive.   LCD televisions are cheaper today because this scrap rate has dropped down.  Defective and unpopular products and products past their "sell by" date often have to be disposed of, whether it is the infamous "E.T." video game, a pair of ugly shoes, a loaf of bread, or a designer jacket.  And the decision to dispose of the item rests with the owner of it, in a free country.

Will Eddie Bauer change its disposal policies as a result of this kid's activism?   Maybe, but really not.   They realize that they need to do damage control on a situation with poor optics.   And giving away a bunch of clothes to a homeless shelter on Christmas eve (with the neck labels removed, to prevent instant returns, of course) would be one solution.

But that beggars another problem.   Eddie Bauer is a designer label - albeit one whose time in the sun has come and gone.   You don't sell upscale clothing brands by putting your clothes on homeless bums.   One reason Pontiac went out of business is that they made the colossal blunder of giving away dozens of the cars on Oprah to homeless people - which backfired in a big way as the homeless could not afford to pay the income taxes, sales taxes, registration fees, or insurance, much less the cost of maintenance and fuel on a brand-new car.

But worse yet, Pontiac was now tagged as "the car of homeless moms" which is not really going to sell well to the general public, who you are trying to convince that the car is nicer and costs more than the Chevy hiding underneath the plastic cladding.   When you give something away for free, people don't perceive it as having value.   Why pay $15,000 for a car that others get for free?   In marketing, you want people to covet your product, not think of it as cheap.

So there are probably very good reasons why Eddie Bauer won't be making a huge donation of unsold jackets to the homeless this year, even if some college kid complains after dumpster-diving that all the clothes were slashed.  No one has a "right" to tell other people how to dispose of their property.  We go down that road, we subject ourselves to tyranny.

Sorry, but no sale.  There are legitimate and rational reasons why companies destroy products, no matter if it doesn't make sense to college kids.