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Is StubHub's Website Deceiving Users? (jordancolburn.com)
270 points by surye 90 days ago | hide | past | web | favorite | 94 comments



Creating a false sense of urgency is a cornerstone of modern marketing. The only difference between this and any other marketing campaign is that you just happened to catch them this time.

This is just like when you go to an electronics store and they put the super expensive tv (almost) nobody buys right next to the still very expensive but comparably more modest model. You are more likely to buy that second tv even if costs more than you initially budgeted because your brain tells you that this is the cheaper model with _almost_ the same features as the flagship tv.

For another example, many ecommerce sites will list the number available in stock if it is low, and sometimes will just say "few available" without specifying a number. This creates the same (sometimes false) sense of urgency.


Yeah, but to stick with the analogy, isn't this more like putting out empty boxes of TVs that have already been sold and having employees dressed as customers frantically buying them in front of regular customers.

Thanks for reading btw, and thanks to whoever posted it here.


Which apparently is done at some of the new hip restaurants.

https://www.washingtonpost.com/news/innovations/wp/2017/08/1...


Hmm, I wonder if Amazon was doing this with their new store at Santana Row in SJ: https://imgur.com/a/qSVYG


If an electronics retailer could do this at no additional cost, I have no doubt that they would.


...or like the employee just shouting rather loudly across the showroom floor to a colleague:

"Hey Joe we just sold another one of the <insert TV you happen to be looking at>. That's the 3rd one today - we better order some more before we run out of stock"


"Here at stooge.io, we're disrupting the Shilling industry with our AI driven machine learning auto-shilling platform. Our PlantBot(tm) is a blockchain auditable marketing urgency generation tool."


"The only difference between this and any other marketing campaign is that you just happened to catch them this time."

I'm not sure this is fair.

By displaying false information, they are point-blank lying. That's misinformation. It should be illegal - it could be.

Some other tricks such as 'creating very expensive items which they never expect to sell' as a cognitive 'price anchor' - well, not quite the same thing.

I suggest there is a distinction between falsehoods and other forms of tricks.

In the end it probably doesn't matter, but I wouldn't mind one bit if there was some consumer protections concerning this.


> By displaying false information, they are point-blank lying. That's misinformation.

As a devil's advocate, despite the presentation being scummy, there's definite consumer value to seeing tickets that sold. It helps correct an information imbalance between sellers and buyers. If all you saw were available tickets, you'd have no way of knowing whether they were being priced above market or not. By showing you two sales, provided they're actually real sales and picked arbitrarily (i.e. not picking the most expensive sales), they're giving you information about what other buyers are willing to pay for tickets. It's like seeing real estate comps...sure the houses have already been sold, but it helps you get a feel for whether the one you're looking at is being sold for a fair price.


If they only showed the sold tickets that would be OK. But they first show these tickets as available, them change them to sold in front of the user, as if they had just been purchased. This is outright lying.


"there's definite consumer value to seeing tickets that sold. It helps correct an information imbalance between sellers and buyers."

I don't think you're playing the devil's advocate.

By all means - they and and as you indicate - maybe should show recent tickets sold. That's valuable information.

But what they are showing is made up data. Not good. And definitely 'anti valuable'.


They are showing tickets that recently sold. Just regardless of whether or not they fit in your searches and whether or not they knew they were already sold at the time you loaded the page.

They are going out of their way to insert previously sold tickets at the top of searches to make things look busy. I never timed how long it could be from sale to "simulated sale" but there were a few that stuck around for probably 10 min (guesstimate, but it was long enough to grab my coworkers and discuss and look at the code and refresh a number of times).


This might be illegal according to FTC regulations. CFR 16 section 232.2 says:

"Another commonly used form of bargain advertising is to offer goods at prices lower than those being charged by others for the same merchandise in the advertiser's trade area (the area in which he does business). This may be done either on a temporary or a permanent basis, but in either case the advertised higher price must be based upon fact, and not be fictitious or misleading."


Creating a false sense of urgency is different from creating a sense of urgency through falsehood.


> sometimes will just say "few available" without specifying a number

I don't think it is a good example. It is often a real technical limitation - they aren't able to keep consistent inventory count between branches, warehouses and internet sites. Other reason for "few available" is some form of dropshipping - they don't really have any items.


> This is just like when you go to an electronics store and they put the super expensive tv (almost) nobody buys right next to the still very expensive but comparably more modest model. You are more likely to buy that second tv even if costs more than you initially budgeted because your brain tells you that this is the cheaper model with _almost_ the same features as the flagship tv.

I disagree that these are equivalent.

Product differentiation exists in part to ensure you leave no money on the table -- if someone is cashed up and wants to pay 50% more for an extra 2 inches on the screen size, then you let them. Conversely, for the people who are super price conscious you have the very low margin end of line product hidden at the back. You alway maximise price by ensuring you have what they want at a price they're willing to pay. Generally this is fair and works well for consumers.

But here we have prices that you _cannot_ pay. It's a dark pattern akin to bait and switch techniques that should (and might) be illegal.


This is analogous to when an unknown Joe creates a new course he specify in italics that only few seats left even though nobody have signed up yet. It is all to just create a rush.


Nothing modern about it, it's one of the classic old selling techniques.


What historical examples can you give where a seller made products look popular using fake customers purchasing unavailable products?

It'd be like seeing a line for a new video game system, and everyone in the line was paid to be there and won't be buying it.


"Act now while supplies last"


Booking.com are the all-time kings of this approach. The search results page is littered with highlighted messages like.

“4 people are looking at this room now”

“2 people just booked at this hotel”

“Too bad you already missed out on this hot deal”

“X% of the neighbourhood/city/region you’re looking at is already booked!”

...

It’s quite likely real information, but the timeframes and language are vague enough to make you feel like you’ve got about 5 minutes to lock a room down. They do such a good job at instilling anxiety that you feel like you achieved something important when you finally book.


The "... just booked this hotel!" is the funniest because they make it seem like they booked it for the dates you're searching.

In reality it's somebody booked the hotel, at some point in the past X (minutes? hours? days?), for some dates in the future that more than likely have nothing to do with when you plan on being there.


Someone recently wrote about their dark patterns, and how sometimes it's actually false information: https://medium.com/@ilyadoroshin/bad-ux-how-booking-com-dece...


As soon as I bring up any website using this plugin and its constant stupid popups ("Amy in Georgia just bought these socks!"), I just click the back button.


This literally happened to me yesterday. I knew the tricks, it didn't matter. It pressured me so hard and made the shopping experience so terrible.


I opened other tab with same place and I was getting warning about myself. They clearly know by session that it was same user just don't fix it on purpose :/


Company responded and said they removed the "feature". They confirmed to me that it was part of an AB test (which I had seen in the code), but did not confirm or deny my suspicion that the AB was used to apply it only to events where it was less likely to be discovered.

I was half-jokingly going to ask for tickets to the game, lol. But after they requested I post an update and clarify their response to removing the feature, it just felt wrong. I mean, I'm glad they removed it, but that's a pretty big thing to act like it should all just be OK and it's a "feature" users didn't like. And I think their urgency in removing it only shows how bad it really was, not how concerned they are for users.

https://twitter.com/StubHub/status/907384565085257729


> And I think their urgency in removing it only shows how bad it really was, not how concerned they are for users.

Well, that only really shows how bad it might be or was being perceived and whatever backlash it might generate. It's entirely possible to feel like you have to backpedal on something that was meant entirely for the good of others because it's perceived as self serving (not that this situation maps to that, I'm making a general point).


This reminds me of this tweet about Verzion's "agents waiting" implementation on their website fetching the real count one time and then randomly changing via Math.random(): https://twitter.com/mixonic/status/736575632226852865?lang=e...


I wonder if the FTC would be interested in this. Section 5 of the FTC Act lets the agency regulate deceptive marketing practices. The FTC's test for deception has three requirements:

1. There must be a representation, omission, or practice that misleads or is likely to mislead the consumer.

2. The act or practice must be considered from the perspective of the reasonable consumer.

3. The representation, omission, or practice must be material.

The post suggests StubHub is making very specific misrepresentations about specific ticket rights; the tactic here would deceive a reasonable consumer; and the misrepresentation is made to induce the sale.


I think they key is that they're pulling ticket that are actually sold out:

> When you load a page they get a list of tickets that have already sold

I'm sure they could argue that since they are real tickets are actually sold out then they're not actually being deceptive.

I really hate these dark patterns - been getting worse and worse on travel sites.


Possibly, but here StubHub would have to explain why they displayed it as unsold with a delay, and why the FTC should not consider that deceptive.

If the ticket was already sold, why the delay? A reasonable consumer think that specific ticket had just been sold at that moment, which sounds like a material misrepresentation.


Totally agree with you. Unfortunately, I don't have faith the FTC would side with consumers on this. Now, if Stubhub advertised the ticket as being available on a prior page knowing it was sold out...


It was displayed as being available for a few seconds before it changed to sold...


You forgot:

4. The FTC must give a darn to the point that it actually wants to spend money prosecuting.


But growth hacking right?

In all seriousness, I love how techniques like this are "ok" when the company is considered a "startup", but when it suddenly becomes "evil megacorp", it's all of the sudden considered deception.


I'd be surprised if anyone would think that this is ok for a company of any size.


You're on a YC website. They are open about looking for founders who do these kinds of things.

Keep in mind that YC invested in a startup that was running a service that added malware to software installers and when people called them out on it Paul Graham defended it and said they were doing nothing wrong because there was a tiny "pwn my machine" checkbox in the installer, and if people didn't uncheck that then clearly they wanted a load of malware installed.

I've been writing comments about this kind of thing on HN for years. This one was 4 years ago: https://news.ycombinator.com/item?id=7051099


Go look at the "discounts" on Wish vs the Amazon prices. Big company now, 100% lying directly to the consumer.


I'm not familiar with Wish and it appears that I need an account to look at their site.

More relevant to my comment, I am not familiar with public sentiment of Wish.


StubHub is owned by eBay.


That was my point -> "evil megacorp"


Oh, my bad, I thought you were saying StubHub was a startup.


Music Festivals use this same concept. By having pricing tiers for tickets you can have more "sold out" events, as they happen at each stage, driving interest.

It works, and it is REAL unlike the javascript you see here, but it is still stupid.

Can you imagine going to a Donut shop in the morning that had just sold 10% of its daily inventory and them putting up a SOLD OUT sign for Tier 1 Early Bird donuts?

I hope one day marketers find a better solution for generating interest in their products.


Good point. Races (5k, marathon, etc) do that also to encourage people to sign up early. I think it's dumb, but at least the festival tier thing is honest.

It's the dishonesty that kills me. The reason I think I was bugged enough to look into it is that I fell for the trick. I knew it's going to be a sold out game, so I assumed it was real traffic/user actions and almost let that influence my purchasing decisions.


off-topic, but if you want to go, just go. unless scalping is different than almost anywhere i've been in the country(check local laws, Arlington, TX is dumb) you can usually get in for less than stubhub prices. it helps to find the people the scalpers are looking to buy from before they do

we got into the OU/OSU game in Columbus for less than face

i've only paid appreciably more than face once, and that was when OU played Florida in Miami for the national championship in 2009

i don't have hard numbers, but i've done this over fifty times in the last 10+ years, both coasts, bowl games, etc... mostly college football, but a couple NFL games as well.

there have even been a few times where i was nervous and bought tickets beforehand because it was a big game, and then regretted it when i got there and found cheaper better seats than what i could get beforehand.

i worry that sites like stubhub could stifle availability at games if more people try to just sell online instead of taking them to the stadium

hasn't seemed to have been an issue yet though.

i'm afraid the venues could make more tickets non-transferable and force you into stubhub so they could get a cut of the secondary market, it could actually make it more expensive to get tickets in the end for average events, low end tickets anyway


I see this as a way to let people who are _very_ interested in the event ("true fans") get in while it's cheap, taxing those who are lazier or "lesser" fans for their dawdling.


I would say its probably more due to a commitment made by the fan vs maybe not going and the fact the concert/venue/promoter can invest/spend that money now instead of later.


It works out that way, but you also have a higher chance of forgetting about the concert ticket that you bought a year ago.

Also, since the ticket cartel is also a scalper, they get a cut of the resale action as well!


The key deception with StubHub is that you're not actually buying tickets, you're actually giving away put options for free.


Huh?


Once upon a time, a guy bought tickets for a basketball game on Stubhub. Some months after he bought the ticket, superstar Kobe Bryant announced that it was going to be his last game. Ticket prices shot up and the buyer was thrilled that he still had a ticket. However, the seller was equally unenthused by the idea of having sold his ticket at so much under its now-increased value. So he cancelled the sale. There was a big fuss, and Stubhub gave the one buyer a ticket to the game.

If you give someone a put option for some quantity on something, they then get the power to sell that amount of that something to you at a specific price. Usually, you want to get money in exchange for giving someone that power. In the markets, this is called selling someone a put option.

This chap's point is that you could agree to buy a ticket for $150 to see Kobe Bryant on Stubhub. This doesn't mean you get a ticket. This just means you gave someone on Stubhub the option to sell you a ticket at $150 because if the price rises to $1500, he's going to choose not to sell you that ticket by doing what the seller did in the previous case. Since you get no money for giving the seller the power, you're not selling the option, you're giving it away for free.

That's probably the context to his comment. I neither agree nor disagree with it.


This isn't just a one time thing, it's how StubHub operates. They will even "sell" tickets with no inventory and then not exercise the option if they can't fulfill it profitably.


The other issue is that the venue for the ticket in most cases can reject you for any reason. (Typically venues don't do this.. but they will).

Bought Chris Rock tickets a long time ago with the impression that they didn't have any special terms on them. Nothing unusual in the terms. The ticket was a standard Ticketmaster ticket. Showed up to the Chicago Theather this weekend and they were forcing people to put their phones in a locked bag. I didn't agree to those terms, so I refused. I got denied entry.

(Btw Talked with ticketmaster support about this and they said this was an venue issue, the event didn't have any special terms attached)


Just to be clear, it isn't that it's taking the top few listings and randomly marking as sold, but that the code is going out and retrieving what appear to be already sold listings (as stored in the urgencyMessageListings variable), and just injecting the top 2 from that array randomly in positions 1-5 in the main list (through a Array.splice() call).

While somewhat deceiving, it's not as bad as marking tickets that haven't sold as sold. Imagine if you were trying to sell your tix at the last minute, well that would be bad. (I've sold tix at the last minute before and that would scare me.)


To me the problem here is the transition: they appear available then are marked as sold. Had they appeared sold from the start, that would have been fine. But by transitioning them they've stated a timeline for their sale which is incorrect.


Providing a user with a list of recently or relevant tickets being sold is cool. But Manually adding them to a user list does not help the customer. Especially if they mark them as sold after being "available".


Some poor programmer had to grit his teeth and implement this while pressured by his "agile" "product" "manager" to "finish the sprint".


Probably not that poor after having received his check for doing so.


I meant poor in more of a higher fulfillment sense


So one time I bought tickets to a concert from Stubhub. Then the headliner cancelled their appearance due to unforeseen circumstances and what not. But the concert was not cancelled as there were extra acts who would still perform. The headliner's website informed ticket holders that they could get a full refund "at the place of purchase" if they wanted. I asked Stubhub about that, their reply was (I'm paraphrasing): "Get f..cked. No refund, no nothing.. We don't care."


Didn't Uber have a similar issue? You open the app, see multiple cars around you, so initiate a request, only to discover that the nearest car is actually not that near (and won't take your request)? Uber later said that the display of cars was just representative, that it wasn't revealing the real location or amount of cars near you on purpose to protect privacy of drivers... but that seemed a bit disingenuous.


Where has ethics gone to in the corporate world?

I also came across them displaying say only 4 tickets for what it seems like a sold out event but in reality it was never sold out and the prices were cheaper on the day of the actual event.

I recall seeing something along the lines of the event being almost sold out.

Maybe Stubhub only had 4 tickets during that time so I could be wrong. It is a sale from ticket holder to ticket holder.


> Where has ethics gone to in the corporate world?

I suspect either "outcompeted" or "only required until you've crushed all of the competition who might use it to outcompete you". Neither is a particularly cheering thought.


> if (!globals.hideUrgencyMessage && SH.mbox.justSoldEvent && urgencyMessageListings && urgencyMessageListings.length) {

Have you considered that SH.mbox.justSoldEvent might be noting that there were recent sales, and while they weren't just sold as the page was loaded, the system may actually indicate that sales are happening and to be aware that the listings may not persist in the current state for long?

As of right now, SH.mbox.justSoldEvent is undefined for me, but they may have specifically disabled the system (or only use it if there are sales but not too many). Looking at the seller's interface on SH for this, the last three transactions happened within 10 minutes of when I loaded the sales data, and each were for a pair. Looking at the sales data I can see that the two you had shown to you were consecutive transactions at 2017-09-11T17:45:40.000Z and 2017-09-11T17:38:55.000Z, which I'm willing to bet were the two most recent sales when you loaded the page.

If that's what's going on, it's not only for SH's benefit. This also signals to buyers what's selling right now, and what migh be sold soon in case you are eyeing a particular listing but are holding off for some reason. If similar things have sold recently, maybe that set won't still be there if you wait a few minutes. This isn't necessarily simulated demand, but real demand, the same as if you were in a store and watching a particular item fly off the shelves. If the stock is depleted, you might not be able to get one, so knowing people are buying them might influence whether you feel secure in waiting for a bit or not.

(For what it's worth, I do not work for nor have ever worked for StubHub, but I do work in the event ticketing industry so are familiar with them and how to use them).


I did think that might be the case. However, after deleting the IDs multiple times, the same sold tickets kept popping up, even minutes later (didn't time it exactly, but it was a while).

So, why don't the sold tickets follow the sorting rules, they are inserted at the top. And why is it limited just to 2 of these unsorted previously sold items at the top and not just mark them in their place on the list if they have since sold. It seems pretty clear to me that it was designed to create a sense of urgency to the user. Another user on reddit also reported that they saw items that did not match their filters at all but were somehow inserted on their list.

I am 100% open to the fact that poking around for 20 min or so might not lead me to a complete understanding of their system, but the intent of this code seemed pretty clear to me and I was able to continually able to bring up already sold tickets.


> However, after deleting the IDs multiple times, the same sold tickets kept popping up, even minutes later (didn't time it exactly, but it was a while).

Well, those sales were almost 7 minutes apart. I just looked, and the next sale was at 2017-09-11T17:59:24.000Z, so almost 15 minutes later.

> And why is it limited just to 2 of these unsorted previously sold items at the top and not just mark them in their place on the list if they have since sold.

Stubhub lets you limit the shown tickets to specific zones, sections, price ranges, quantities, etc. There's no guarantee that the latest sales would be visible in your normal display. That said, if they really wanted to deceive people and make them think there was a sense of urgency when there wasn't, they could search through all the prior transactions for this event (~ 100 so far in the last 24 hours) for items that more closely matched the price and/or section and/or row to make you think that what you're looking at right then is what's selling, even if the transactions were from hours ago. Limiting themselves to what I think are likely the two most recent transactions and being completely transaparent about the section, row and prices the were sold at is fairly straightforward if you ask me (and more than you'll get on some primary markets, such as TicketMaster, where promoters will withhold large chunks of inventory to make the event look more sold out than it is, only to release them closer to the event date).

> It seems pretty clear to me that it was designed to create a sense of urgency to the user.

Sure, but what they're trading for that is real market information, which is useful for the user as well. It's a trade, not necessarily a deception or manipulation.

> Another user on reddit also reported that they saw items that did not match their filters at all but were somehow inserted on their list.

So here's a question, say you're Stubhub and you want to indicate the last two sales, so users know what's selling and to hopefully influence them to buy now. You don't want to show all sales, that's proprietary information, and only a certain amount of history is even provided to those people with accounts selling for that event. How do you integrate that into the page display in a way that is noticeable, doesn't detract from other useful elements to much (such as a designated section when there aren't any recent sales, which could possibly be used for more room to show the map or listings), and can easily be added/removed as needed?

I think given those constraints, which I think are likely and not very extreme, the method they chose is a fairly natural choice, even if it doesn't make everyone happy.

> but the intent of this code seemed pretty clear to me and I was able to continually able to bring up already sold tickets.

Careful with attributing intent, or thinking you completely understand all the implications of that intent. There's a lot that goes into something like that and sitting down with someone responsible for it and understanding their position, thoughts and reasoning might change your opinion on the matter even if the intent is the exact same. Imperfect knowledge of complex systems leads to imperfect understanding actions within that system. We have different opinions on what is going on here, but that might just be because one or both of us is missing information that the other has about how the system functions as a whole. I, for one, see this almost entirely in a positive light, now that I believe I understand some of the details of how it functions. It's not fake data being presented, and it doesn't seem to be cherry picked to create incorrect assumptions in the buyer. I think it's the most recently sold items, and while the signalling isn't perfect, I would much rather have that data available than not.


I appreciate the thorough response. It did make me stop and think about my assumptions. You present some convincing points,but I still come to the same conclusion because:

1. The sales stop showing after the first load and the values are saved in application storage. Why would they hide them if they are so valuable to the user. My guess is that users would be annoyed to constantly see these values and the users would catch on that they are only "recent" and not "realtime" sales

2. Why are the recent sales randomized in their location on the list. If it is such valuable info, why are they not placed at the top every time. Again, b/c users would ignore them and quickly learn they are not real-time sales.

3. If it so valuable to users, why not present it in a special location such as its own list. Why would useful pricing data be randomly put into the top of the list. Again, users don't really care so much about what recently sold as much unless it affects what is available now.

4. As SH, you have the option to show people recent sales, or how many tickets that are left. But to only show two recent sales and do it in a way that blends with other tickets is a deliberate choice to manipulate the user in a way that does not coincide with their expectation that those tickets shown to them on load where available when the page was loaded.

Basically, this "feature" was a combination of many design decisions and all of them lean toward cues to the user that these items are "real time" sales that just happened since we loaded the page, and away from helping the user realize the true nature of these sales. And of course it is done in a way that benefits stub hub and not the consumer, which is upsetting from a place that presents itself as a "marketplace", since users expect transparency from them (the price you list is the price, what I am told is available is available).


Fair enough, and some of those are good points that I perhaps wasn't giving enough credence to, particularly the first. The others have weight, but I think that weight canby mostly or fully mitigated by common business or implementation reasons (as noted previously).


This isn't completely relevant to your point, but I'm curious how you're seeing the sales times?


If you go to the pricing page on Stubhub's sales interface (as a seller) and open the developer console, you can see the request as it grabs the last X sales to show as a pricing guide. While the table rows representing each sale only include the date, the actual JSON data includes a full timestamp, and you can see it in that request.


I have gone to Stubhub a few times now to try to replicate this, and searched for tickets for popular NFL and MLB teams, and I can't get this "Sold" thing to work the way this posts shows it - actually it doesn't happen at all for me. Has anyone else been able to replicate the "sold after load" behavior? Is it only on specific events?


Maybe, they had some other junk about AB test flags and I didn't dig far enough to see how that was set or if it was random from the server. My wild guess is that they turn it on for popular events close to the time of the event, so there is less chance of users noticing.


Yeah, that's likely the case. I do not see the urgency message in my session data for this NFL game (suggesting it won't do it's sold out thing for this event) but I do see something in my local storage called "cache:local:app:urgencyMessageData"


"ugrency-message"


I actually didn't catch that typo they made the first time as I was so shocked at how easy it was to force it to keep reloading already sold tickets.


If they'd used a minifier, most or all of this embarrassment could have been avoided.


I was pretty surprised, but maybe they were hoping for security by obscurity as it was buried a little in the sources. I don't think devs as a whole have really grasped a lot of the trade-offs/repercussions of moving so much logic to the client side.


WebAssembly will help hide this!


Wouldn't decompiled/disassembled wasm code be about as readable as unminified JavaScript?


Not if there was a proper optimization pass while compiling.


They just disabled it, so I guess that’s a win...? https://twitter.com/stubhub/status/907384565085257729


I'd argue they aren't deceiving users as those tickets were actually sold

It would be deceiving if they showed an artificially falling stock counter or something to that effect, but in reality they are showing actual true data, it is only the way in which they show it (randomly inserted amongst search results) that can cause a sense of urgency, but there is still no deception here.


I am only a user, but I find TickPick a solid alternate choice to all other ticket sales sites. The "no BS hidden fee" got me hooked up (plus the company always give out promo code). Other products aren't as transparent.

But this sort of false urgency is misleading and should be illegal.


SH: Deceive until we get caught, then we will 'listen' to our customers and adapt.

Blegh.


I can't believe thay did such a deceptive manipulation in JS! We can acces this JS code, how stupid are they?!


Airbnb is also adopting this strategy.


Reference requested.


I haven't heard of this website before. Don't forget that bad publicity is still publicity.


>>I haven't heard of this website before.

StubHub is widely, widely known to anyone who attends music events or sporting events. It's the largest exchange by a lot. They don't need bad publicity to spread the word.


Sometimes. Unless bad publicity causes regular users to stop contributing revenue.


This is an interesting play on a very old con game[0] that was common in used car dealerships and appliance shops.

It works like this: You walk in, interested in buying. You talk with the salesman, settle on a car but are having cold feet/want to talk it over with your spouse, etc. Just as you're about to "walk away", an employee dressed down to appear as a customer, swoops in and makes a "cash offer" on the car you were interested in. Haggling ensues with the other guy protesting that "you weren't going to buy it, so I want it!" and you reluctantly put a down payment on it to keep it from being stolen out from under you (good old loss aversion at its finest).

Alternatives to this include having an appliance/couch that is not ridiculously, but significantly marked down from its street price that the salesman is convincing you to buy. Your sales guy talks about what a great unit it is and its great price and you're ready to pay and take it home when he springs on you that the "Sold" sign fell off the unit and conveniently slid underneath it. Not to worry, of course, because there's just as good of a deal on the upgrade and even though it's a few hundred more, he'll knock the same hundred or so off of that price that the other was marked down, so it'll cost more, but it's a better unit[1].

Of course, the more expensive unit isn't -- really -- more expensive, or better than the one you were looking at, it's just marked at a price they can actually sell it for and make money. The other one wasn't even for sale in the first place, it's a prop. This is exceptionally common at middle-class furniture stores where the prices listed on everything are MSRP and the product never sells for that price with even the lowest-on-the-rung sales guys having a percentage on the price that they're allowed to discount without approval[2]. It gives the salespeople the lee-way to make you feel like you're getting a good deal and pull stunts like this to up their commission/the stores profits. When I worked retail (not commission), this was a common practice and that "more expensive item" often had a bonus attached to it for the salesperson (sometimes money, sometimes free stuff).

It's interesting to see some of this playing out in the digital world, which basically eliminated a lot of these practices because you can instantly compare pricing/products among many sellers/stores, but there'll always be ways to play at the weaknesses of the buyer.

[0] Which I thought was a clearly defined illegal practice, like "bait and switch" is known to be. But might not be (though as some have mentioned, the FTC might have an opinion on the subject).

[1] ...and this is basically a form of bait and switch, but it's a lot easier to get away with and falls into a grayer area depending on the jurisdiction (usually a product that isn't available has to be advertised at a great price where upon arrival to purchase the product, an alternative, higher-profit item is peddled with the company having never had any intention of selling the cheap product).

[2] Though a really common way of convincing a customer that they're getting a great deal is to bring that manager in to do the ceremony of granting a discount even though the sales guy could have done it himself. "Since it was my fault in trying to sell you something that was already sold, I'll explain that to the GM and see if we can give you a bigger discount for the cock-up."


Many people lack a gut level understanding of this concept: a vendor who deep discounts or sells at cost can generate almost arbitrarily large revenues. For a while.


How is this relevant to the post at hand?




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