Wednesday 23 May 2001
Dynamic Pricing at Burger King
I eat lunch at Burger King a lot. Some would say that I eat lunch at Burger King too much. I live and work in Reston, VA, though, and there just aren’t many options for lunch here. Most of the would-be lunch-contenders have pissed me off so egregiously in the past (see Restaurant Reviews for more) that they’ve been removed from the running altogether, at least temporarily.
Anyway, as I was saying, I eat lunch at Burger King a lot. I am also a vegetarian. The trick there is simply to order a Whopper with no meat on it; there’s a whole lot of other stuff on that burger, and it’s the fries that make the whole place worthwhile, anyway.
One recent day, I went to Burger King with a meat-eating friend. We ordered substantively the same thing. His Whopper had meat but no mayonnaise, while mine had mustard but no meat. Here are our receipts from that meal. They’re a little damaged as a result of the Burger King policy of taping the things to the tray liners:
Notice that at Burger King #12246, it costs the hapless vegetarian $1.35 to get them to leave the meat off the burger. Have It Your Way, indeed.
I asked the manager of the restaurant about this, and in her halting English she told me that this was because "there was no discount" for the Veggie Whopper. No kidding. The Veggie Whopper costs $0.50 less than the regular Whopper, but since you don’t get the $1.79 discount for the "value" meal, you wind up in the hole.
A week later, the same omnivorous friend and I went to a different Burger King (#11058), about two miles away. We, being creatures of habit, ordered exactly the same meals. Here are the receipts from that trip:
Notice that in this case, the Veggie Whopper meal cost $0.26 less than the Whopper-with-meat version. But also note that the with-meat meal cost almost a dollar more than it had a week earlier, a couple of miles away.
In this case, the Veggie Whopper has been rung up as a Whopper with No Meat. These are identical sandwiches — down to the price — but the Whopper with No Meat gets the "value" discount. Except at this Burger King, the "value" "discount" is $0.98, while two miles away it’s $1.79.
So this afternoon, in search of amusement, I went to Burger King (12246) again. I went to the $1.79-discount-if-you-eat-meat one, and ordered my usual.
Please note that this is an entirely new price, not seen anywhere else on this page. What they’ve done here is charged me for the full-price no-discount Veggie Whopper meal, but they have not given me the paltry $0.25 discount for not eating the meat.
A few minutes after I ordered this, the manager — the same person who had told me, a little over a week ago, that there was no discount for the Veggie Whopper, gave me this:
She also gave me the $1.02, for a net price of $5.74, or what you pay for the Whopper with meat at the other Burger King.
On May 31, Ed and I went back to that same location (12246), and a pattern began to show up:
And in case you’re wondering: yes, one of those receipts is distinctly lighter than the other two in real life. This is the third time the with-meat meal has cost $5.74 (though only the second time at this location), and the second time that I’ve been charged $6.76 and then refunded $1.02.
Like last time, this time the manageress initiated the refund without any querying or complaining from me. She did, however, attempt to give me $1.00 along with the receipt that said she was giving me $1.02. I had to ask her three times, and point out the amount on the receipt to her, in order to get the other $.02.
At this point — if not sooner — you have no doubt come to the conclusion that I am a glutton for punishment. Why, after all, do I keep going back to these places? Well, as I said above, there aren’t too many options for lunch in Reston. And with Burger King, there’s always the miniature adventure of trying to guess what we’ll be charged. It’s kind of like a little lunch-hour trip to Vegas, I suppose.
On June 6, Ed and I went to yet another Burger King (9886), no more than a few miles from the other three featured here. I inadvertently threw away the receipt for my meatless Whopper King meal, but since I paid with a $5 bill and had $0.64 in my pocket afterward, I know that I was charged $4.36. Ed’s receipt appears below:
Note that this Burger King uses a different cash register system (purple ink on paper as opposed to the more-common thermal-printer system) — and that it has a different way of ringing up the food. This one charges for the whole ‘Value Meal’ at once, just like it’s presented on the menu. I have to say that this is a lot simpler. It also resulted in the lowest price to date for this meal, by 32 cents.
Here’s a little chart to clarify all these prices. It includes a few transactions that I haven’t scanned reciepts for. You know what they look like by now:
Now, I’ll be the first to admit that I don’t have enough data points here to arrive at any serious conclusions. Since acquiring those data points would require eating at Burger King a lot more frequently, I’m just going to arrive at a few conclusions anyway.
I think that the proper charge for this meal is $5.74 with meat, $5.48 without — amounts we only see once above. Burger King clearly wants to discount the meatless Whopper by $0.50, and that does not seem to fit in with a policy of turning around and screwing their vegetarian customers by charging more for the fries and drink should you want the burger without meat.
What’s amazing is that the Burger King company has designed a system where a customer can be charged anywhere from $4.36 to $6.76 for the same thing. It’s obviously not in their interest to undercharge me, and it’s not in their interest to overcharge me, either, since the burger business is a competitive one.
Burger King does seem to care more about their customers than other burger chains. (I dare you to attempt to contact anyone at McDonald’s to offer customer-service comments. Your only option is the store manager with the English-language problem. Burger King at least maintains an 800 number.) Unfortunately, they’ve gone in for the zero-training approach to hiring employees, while not designing their systems for people with zero training.
Zero-training is the Holy Grail of fast food human resources. The idea is to grab people off the street, slap ‘M’s or ‘BK’s on their chests, and plop them down behind the counter. (It’s also possible to get federal grants for "training" these people to work in the zero-training environment, but that’s a separate rant entirely.)
McDonald’s appears to have had more success at this than anyone else. Their systems — the cash registers, Coke machines, fry friers, etc. — are all designed to be operated by people who have never seen the thing before. This is why the people behind the counter there always seem so confused: they are.
Burger King is trying to hire the same people McDonald’s is after, so they’ve embraced the whole zero training thing, too. Problem is, the restaurants are still designed to be operated by people who understand what it is they’re doing, and who give a damn about doing the job properly.
As a result, it’s likely that only the restaurant manager has any idea at all what’s supposed to be happening. And even that can’t be relied upon.
Burger King might also face some legal liability from this issue, even in the consumer-hostile Commonwealth of Virginia. The Veggie Whopper does not appear on the menu at all, but the Whopper King Size Value Meal (without cheese, and with meat on the burger) is listed on the menu at $4.99. (And determining this is difficult; the Whopper, Veggie Whopper, Whopper with Cheese, and Veggie Whopper with Cheese are all, according to the computer, separate items; you’re not charged $X for the Whopper and $Y for the slice of cheese, you’re just charged a random amount for the Whopper-with-Cheese; nevertheless, the menu only lists a price for the Whopper.)
According to the Burger King website, Burger Kings around the world serve approximately 11.8 million customers a day. If you multiply the greatest difference between prices I have been charged for the same food — $6.76 and $4.36 — by 11.8 million, you get $28,084,000.00.
I don’t suspect that Burger King is overcharging all their customers to that extent. (If they overcharge everyone by just a penny, though, they make an additional $118,000 a day.)
If 1% of their customers order the Veggie Whopper (with cheese) and are charged $6.76 instead of $4.36, that’s over $283,000 a day.
I’ll admit that, to an extent, I do seek out this punishment. (Face it, this web page wouldn’t be half as interesting if it just said things like, "Went to BK again today. Was charged the price indicated. Tomatoes again resembled nothing so much as sliced baseballs.") But the fact remains that Burger King is charging fairly random prices for their products, and that they are probably making some serious kablingy from the practice.
Posted by tino at 16:00 23.05.01
Monday 07 May 2001
My Recent Bank Experience
Most of my banking activity is conducted at a distance. My salary, royalty checks, payouts from brokers, etc. are all deposited directly; my accountant pays the bills; and I get cash from ATMs.
So it was an unusual experience the other day when I went to the bank in person. I needed a few thousand dollars in cash or its equivalent — money orders or cashier’s checks — to buy a car.
My day-to-day accounts are at Suntrust bank, because they haven’t egregiously pissed me off yet, and because they have a branch near my house.
That branch’s lobby was closed when I needed my money, and they didn’t have the ability to generate cashier’s checks from the drive-up, so I was directed to a Suntrust counter in a nearby Safeway.
The bank-in-the-grocery-store is something that I thought was dying. The concept was popular in the 1970s, when banks were rarely open past 3 pm; now, there’s less need for it. All over the country, but especially (it seems to me) in the Washington area, banks are starting to get arrogant again, and the supermarket mini-branch is making a comeback.
The Safeway branch I went to was staffed by two teenage girls, both wearing generic mall casual clothes: jeans and shirts from Express or The Gap or some such store. One girl had an unfortunate case of painful-looking acne.
The girl without the acne was already with a customer, so I drew acne-girl. She put aside her calculus homework (literally), and aksed when I needed.
I told her that I needed a cashier’s check or money order, whichever would cost me less. As it turned out, I needed a money order, because I didn’t have with me the name of the person from whom I would actually be buying the car.
So I handed over my driver’s license and my bank card. It took a while, but eventually she figured out who I was, and how much money I had in my account.
Trouble was, she didn’t know how to generate a money order. Neither did the other girl. The branch manager, who had until this time been hidden somewhere, popped out and started assisting. She was obviously a banking professional, but it had been a while since she’d worked as a teller, so the process was still bumpy.
So bumpy that at one point I asked them whether they had the entire amount in cash. They didn’t, and they seemed a bit surprised at the notion. That a bank branch would have a few thousand dollars on hand — we’re talking about an amount that you could easily fit into your pocket, even in $20 bills — was, apparently, unthinkable to them.
Eventually, I got three money orders (there’s an upper limit on the amount of an individual money order, a limit that was determined with certainty only when the computer refused to generate one with of greater denomination), and a few hundred dollars in $20 bills.
(When buying a car from an individual, always plan to pay part of the price in cash, in small bills. If you have a cashier’s check for $5000 in your pocket, it’s going to be a lot harder to pay $4500 if you discover that the tires are bald.)
The fifteen $20 bills were counted out by the teenage girl. She had to restart once, because she was momentarily unclear on what came after $180 ($200) — looks like she needed more math and less calculus. She had a hard time counting the bills, and they wound up in a big pile, not a neat stack, on top of the counter.
Oh, yeah, and the counter was entirely at eye-level. In the past, the tellers’ windows were designed for privacy, so the other people in the bank couldn’t see what you were doing. The idea is that if it’s widely known that you’ve got $5000 in your pocket, you are more likely to be a target for robbery.
At this Safeway branch, though, all the money goes over the top, and everyone nearby can hear the teller count out the cash. The two people in line behind me (all of this took a while), the customer at the other window, and the people in line behind him all knew that I was walking away with several thousand dollars in cash or a cash equivalent.
Now, I don’t object to teenagers working, or even to them working in banks. I realize that Suntrust has to maximize their profit, and so they have to get the cheapest labor they can. And for the teenagers, working in a bank, even for lousy wages, is better than working at McDonald’s.
But I object to the fact that Suntrust is now failing to provide professional care for my money. Banks have long built fancy buildings, solid buildings, to communicate to their customers that the bank is trustworthy, that it is going to take good care of the assets entrusted to it.
The Suntrust counter at the Safeway continues this architectural tradition: while most of the store is utilitarian and lit with fluorescent lights, the bank area has a lot of wood paneling, (fake) marble, carpet, fancy lighting, etc. But it’s all meaningless when the teller is wearing a T-shirt and doesn’t know how to count money.
I see this, as I see a lot of things recently, as a symptom of the ongoing death of the middle class in America. Rich people still get professional bankers, competent and dressed in wool, to count their money out to them. But the poor have long endured unprofessional bankers, in the person of clerks at the yellow-signed check-cashing shop/Western Union bureau in the ghetto.
And now, at least after 3 p.m. on a weekday, and at least if you’re a Suntrust customer, this is the best banking service available in Reston, Virginia, a high-midle-class suburb in the wealthiest county in the United States.
Part of this povertization of the middle-class experience is due to the fact that what were once almost exclusively middle-class experiences are now accessible to the lower-middle-class and to the poor.
When the Pennsylvania Turnpike was young, the service area restaurants along the way were Howard Johnson’s, with table service, real plates and cutlery, and white tablecloths. Now, they’re generally Sbarro or McDonald’s, almost invariably filthy.
In the early days, driving across Pennsylvania was something the middle-class did. The poor would take the train, if they went at all; they wouldn’t tend to own cars. Now, the middle-class is more likely to fly than to deal with that fairly arduous drive.
The poor experience hasn’t really moved up the ladder to supplant the old middle-class experience, though; rather, the middle-class experience that used to mean white tablecloths and table service has been pulled down, to somewhere halfway between the old poor experience and the old middle-class experience, and lodged there, as the only option in between the true grinding poverty of government assistance and the expensive world of the wealthy.
It’s possible to chalk much of this up to the Faith-Popcorn-BS-"cocooning" trend: cinemas have gone downhill because the middle class, with all the money, is at home watching DVDs; going to a restaurant is a miserable experience because the middle-class is going to Williams-Sonoma and creating their own dining experience at home.
More likely, the cocooning trend is a reaction of the middle class to the decline of their public options. The middle class is not sitting at home at night, counting out money for each other.
And the problem is this: The United States’ ease of social mobility is a crucial component of the culture that has resulted in so much entreprenurial success in this country. Fifty years ago, there was a large difference between the day-to-day experience of someone with a household income (in 2001 dollars) of $20,000 and someone with $90,000. Today, this isn’t so true. The $90,000 household can just go to Burger King more often. The $20,000 family is not going to strive as hard for advancement, because unless they become fantastically wealthy, their lives aren’t going to change that much.
Posted by tino at 10:13 7.05.01