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Different Prices for Different People
Aug 01 2007 Ethics 6 comments

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Is it ethical to offer your products or services at different prices to different people? In this free enterprise system, it’s difficult to be both ethical and do good business. Here’s an example:

You run an antique shop and one of your items is an antique spoon from the early 1800′s. Now there’s nothing wrong with talking to your customers and hyping the product up, saying how unique it is, how rare it is, what people during that time and that location were like, etc. But what if the customer looks to be someone who is new to antiques and has no idea as to the real true value of this old spoon? Because with antiques, an uninformed customer might pay $100 for an old spoon when it’s really only worth $5.00. So is it ethical to make up a price on the spot, a really high price, to see if the customer will bite?

Good business or bad business? Ethical or unethical? Do you need to be a cutthroat businessman to be successful or is there any room for a “nice guy” or do nice guys finish last in love and in business.

Comments

gtm on 08/13/07

I found find it to be very unethical but it all comes down to the money with businesses.

Just look at a car dealership for example. The people that know how to bargain can get a better deal, if you can’t, you pay full price and the saleman wins.

Mark on 09/15/07

Of course it’s not ethical, but it’s perfectly legal, and happens all the time. The best way for would-be customers to respond to this is by just walking away.

DA on 09/15/07

Most brick-and-mortar stores have price tags on their stuff already.

Its bad for customer relations to gauge customers, but in some cases the customer will not be a repeat customer (‘tourist rates’ is a great example). Likewise there are environments where haggling is appropriate (flea markets); in these places those that won’t/can’t haggle won’t get a better price.

Ethically, it seems a pretty simple proposition that misrepresenting a product is unethical.

Is it unethical for a ballpark to sell a 1$ beer for 12$ – it sure is. Its even more unethical for them to disallow your own beverages (I don’t go to ball games).

In your example its pragmatic to introduce the new customer into the world of collecting spoons and to help them out and show them the ropes. This sort of behavior engenders loyalty, which is what merchants want more than anything else (and customer loyalty is increasingly difficult to find, in part because merchants don’t attempt to earn that loyalty).

DA

Bill on 09/15/07

What you’re selling is worth whatever someone is willing to pay for it. As long as you’re A) honest about what you’re selling abd B) haven’t played monopoly games then sure, whatever price you convince someone to pay, that’s what its worth.

David Schwartz on 09/15/07

These days, pissing off a single customer by cheating him out of $100 can turn into a national public relations nightmare. You might like the extra money that day, but you may really come to regret it next week.

Customer loyalty is invaluable. My family owns a small retail store, and I’ll tell you right now, we’d *never* cheat a customer for a quick buck.

When the Wii first came out, we managed to get a small number of them. We sold every single one, first come first served, for the list price.

Ben on 10/04/07

I don’t like to however my manager has me go in at different margins depending on competition, etc. I recently changed jobs and am very thankful about that. I sold for 4 years and should not have ever done it because I feel dishonest now.


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