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
Posted by: abdulgani at August 25, 2004 03:13 AM
Posted by: Justin Slotman at April 5, 2005 09:00 PM