I was out for a walk at lunchtime one day and saw a huge billboard for a payday loan company. The huge font read
$100 LOAN FOR $1
Presumably this means that you’d pay only $1 in interest on a loan of $100. This is cheaper than the usual rates for payday loans, so I suspected a catch. Then I noticed a smudge to the right of the large font. I had to cross the street to read the fine print written sideways:
ON FIRST LOAN
The font for the fine print was so much smaller that all three words together sideways were the same height as each large character in the main message.
So, the offer is a lower cost entry to a cycle of debt and despair. It all reminds me of the techniques used by drug pushers when I was young. The first joint or little baggy is free, but you’ll have to pay when you come back for more.
Yes, that's exactly what it sounds like and is a very common marketing strategy even for "reputable" businesses. Hook the customer with a cheap offer and then keep raising the rates until you bleed them dry. Rogers and Bell come to mind :)
ReplyDelete@Stephen: You're right that this strategy is very common. I guess it's the nature of the product that determines how we view new customer discounts.
Delete"C'mon everybody is doing it" is what a reliable source has leaked to me as their next marketing slogan.
ReplyDelete@Big Cajun Man: Subtler variants of that message seem to be very effective, unfortunately.
DeleteUsually it's $20 for $200 and I keep on seeing a cash money ad that has a special deal of $20 for $300 which is "half off". I guess if you can see how that is half off you can also see that payday loans are a good deal.
ReplyDelete@Greg: Funny. Maybe go for $50 on $300 and call it half off?
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