Government To Ban Introductory Offers

That we’re ruled by idiots is obvious – all the clever people have better things to do with their lives than try politics. But it still amazes as to quite how stupid the people inhabiting the halls of power can be. For now they’re suggesting – insisting perhaps – that introductory offers must be banned:

Overcharging loyal customers will be banned under new plans unveiled by the Government

What is overcharging a loyal customer? Charging them more than a new one. What is an introductory offer? Charging a new customer less than an old one. They are, obviously enough, the same thing.

Overcharging loyal customers could be banned under new plans being unveiled this morning by the Government. The so-called “loyalty penalty”, where existing customers see their insurance premiums or mobile contracts increase in price or are charged more than new customers, costs consumers £4.1bn a year.

So, let us just run through this. You can, if you so wish, sign up with Amazon for a free trial of their Audible product. Audible Membership

Well, quite, Woo Hoo!

If you decide to keep it after the free trial you will be charged some amount of money for being a loyal customer. Those who turn up for the first time will – presumably – continue to be offered that free trial period. This is charging loyal customers more than new. This is offering a deal to new customers not available to extant ones. These are the same thing.

They’re also, by the standards government seems to be using, soon to be illegal.

Which is, of course, insane. And thus the proof that we’re ruled by idiots. But then we knew that, right?

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Dodgy Geezer
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Dodgy Geezer

This is offering a deal to new customers not available to extant ones…..They’re also, by the standards government seems to be using, soon to be illegal. Which is, of course, insane. Why? This is banning a particular form of customer encouragement. Quite an effective one – it’s the one often used by drug dealers to get people hooked – the first one is always free. I would say that it was up there in effectiveness with providing misleading images of consumer goods. And we feel that such adverts should be regulated for all sorts of reasons. A major justification for… Read more »

Leo Savantt
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Leo Savantt

In a world where free initial offers were banned many might not try out a new (to them) service. The company might be expected to do less business and the customer might miss out on the benefits of the new product. Companies know that if they offer a free trial some will continue and become paying customers and some will not. The key here is informed customer choice, free offers help customers make choices without financial risk. “often used by drug dealers to get people hooked – the first one is always free”, an urban myth. Drug dealers know that… Read more »

Dodgy Geezer
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Dodgy Geezer

I wonder how your ‘might’ argument changes to ‘is’ by the end?

Here’s some of my evidence that free hand-outs happen. Where’s your proof that they don’t happen? https://skeptics.stackexchange.com/questions/33094/do-dealers-give-free-drugs-to-teenagers/38634

In any case, you are arguing against a position I did not adopt. I do NOT say that such a law would be necessary, or good. I said that there it is not so ‘obviously’ insane that claiming it so to be requires no evidence beyond the claim. I was essentially complaining about an argument being made by assertion, rather than by evidence. Much like your last sentence….

Leo Savantt
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Leo Savantt

I concede the point that in Baltimore, USA teh Baltimore Sun reported that in 1997 some drugs may have been distributed without charge, but since we are talking about the UK that doesn’t seem all that relevant.

You did argue that free offers are a form of deceit, I that if they are not made deceitfully they are not.

The policy is colloquially insane, because it will made it harder for people to try products and harder for businesses to get product exposure. It has no upside.

But we will just have to agreer to disagree.

Dodgy Geezer
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Dodgy Geezer

You have problems reading beyond the first paragraph? Read further and you will find more recent examples, and examples in the UK. I can readily find other discussion of the practice if you prefer – this, for example: https://www.independent.co.uk/news/uk/home-news/crack-cocaine-drug-dealer-student-addiction-police-health-a8838886.html It seems to me that agreeing to disagree really proves my point. Which was NOT that banning free offers is a bad idea, but that banning free offers is not prima facie ‘insane’, and it therefore requires evidence, rather than assertion, to label it so. To accept that disagreement about whether the policy IS insane or not is possible, suggests to… Read more »

Leo Savantt
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Leo Savantt

Allowing dealers to give people free addictive drugs would be insane. We don’t as it is illegal.

Allowing publishers to offer free trials of audio-books is sane. We might be making it illegal, that really is insane.

Dodgy Geezer
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Dodgy Geezer

There must be a limit to the number of times you can misunderstand me, but I suspect that you are nowhere near reaching it yet. I am NOT arguing for the sanity or otherwise of banning free trials, or any other method of trying to get a customer hooked on a product. I AM arguing that seeing this issue as a problem and attempting to address it by law is NOT OBVIOUSLY insane. It may well be impossible to draft practical legislation – it may well be that legislation is not an appropriate method of addressing the issue, but I… Read more »

Leo Savantt
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Leo Savantt

I think that perhaps finally I do understand.

If I have understood you correctly you think there is a problem with people being offered free trails (of legal goods).

Whilst I think there isn’t, in fact I think giving people the chance to try something without cost (without miss-selling) is a wonderful thing.

Dodgy Geezer
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Dodgy Geezer

If I have understood you correctly you think there is a problem with people being offered free trails (of legal goods) Fairly close. I think that there COULD BE a problem with people being offered free trials, or cheap initial offers, because this is an established psychological trick to get people to depend on a service, and then raise the price later. So the procedure could be two-edged, and it would be appropriate for regulators to watch that aspect carefully – and, if necessary, produce legislation to control this issue. And if this is accepted, you can see why I… Read more »

Leo Savantt
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Leo Savantt

Don’t you think that seeing offering a free trial of a product or service as a psychological trick as a bit paranoid?

Products and services aren’t addictive drugs, if the provider raises prices beyond what the customer is willing to pay they stop buying the service/product and in a free market look for a cheaper supplier.

I can’t recall any free trials that I took as anything but beneficial, mostly because I decided I didn’t need or want the product/service enough to pay for it, there-bye saving me money, whilst allowing me to genuinely evaluate the product/service without cost or commitment.

Dodgy Geezer
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Dodgy Geezer

Don’t you think that seeing offering a free trial of a product or service as a psychological trick as a bit paranoid? Well; no, I don’t. Because the tricks are so well known that they have their own slang vocabulary – bait and hook, subscription trap and the like. You will find warnings about the way people find it difficult to cancel all over the net. And we now have the Government worrying about it. So there are well-known and appreciated problems with free trial offers, and all consumer advisory organisations agree with me. If I am paranoid, I am… Read more »

Leo Savantt
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Leo Savantt

All I can say it is that with Amazon’s free trial it was much easier to cancel than it was to sign up in the first place. Signing up meant entering information, cancelling entailed clicking just one link in an email and then clicking one box.

Miss selling can occur with free trails, but that is true for any transaction, hence consumer protection legislation. And of course consumer groups are bleating on about free trails, they have to justify their existence and remuneration somehow.

The description of insane relates to proposals to ban free trails, colloquially it looks pretty mad to me.

Dodgy Geezer
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Dodgy Geezer

As Joad used to say, “It all depends on what you mean by…”… Taken literally, such a proposal might mean banning test drives in a car you might purchase. Which could justify the description of ‘mad’. But equally, the target might be free trials which are designed to trap people into continuing once they are hooked, which seems a reasonable sort of activity to suppress. In practice, I suspect that it would prove impossible to draft legislation which accurately targets the latter without affecting the former. However, ‘mad’ is a perfectly justifiable description of much legislation which is currently on… Read more »

Leo Savantt
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Leo Savantt

You’ll get no argument from me when it comes to a great deal of legislation, too much of it is absolute lunacy. Mrs. May’s zero CO2 emissions target being a prime example, impossible, unnecessary as well economically catastrophic.

Dodgy Geezer
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Dodgy Geezer

The thing that surprises me is that it’s mathematically provable lunacy, and proven in practice with experience in other countries. And yet no one is allowed to complain – and it they try, no one listens. Charlie Mackay’s excellent book “Extraordinary Popular Delusions and The Madness of Crowds” refers…

Leo Savantt
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Leo Savantt

Mackay’s work really details much of what is going on today, but I think that it goes deeper, far deeper. Our modern world is one of moral relativism, devoid of yesteryear’s religious imperatives people find themselves at sea, unsure of what is right or wrong, both in terms of personal morality and in a wider social context. We have passed the buck to others to decide for us what is and what isn’t correct behaviour, if another finds offence in our actions or words it is we that have transgressed. Unable to decide for ourselves we allow others to judge… Read more »