May
3
A Nice Touch, from Victor Niederhoffer
May 3, 2009 |
One always expects the Japanese to be very honest. It is well known that if you lose your wallet loaded with cash in Japan it will be returned to you a year later intact, and that the only place as safe as Japan is Arthur Avenue in the Bronx. The idea of even looking at a dinner tab to check its correctness is certainly inappropriate since 95% of the customers are Stuyvesant and Julliard blood brothers. So I was stunned when eating at Masa the other night where the price had recently been reduced from $500 to $400 to find the following item printed on the check as it was handed to me, and had to look at it closely since I am over 40 and don't wear glasses. "There is a service charge of 20% added to the check. But it is not a gratuity. It covers the administrative and operating expenses of the restaurant and is not shared with employees." What a way to end a beautiful dinner. Presumably other restaurants and other businesses have operating expenses also? And presumably when one is told there will be a 20% service charge, one would expect it to be a gratuity? There are all sorts of new ways for companies to survive the recession. Restaurants in New York are taking to adding a surcharge onto the bill if you wish or eat bread or drink water. But most businesspeople know that making a customer feel that he's been gipped is not a long run way to success. On the contrary, the customer should always feel he's getting more than his money's worth. I would be interested in other special shortsighted recession-beating forays that our specs have been exposed to.
Steve Ellison writes:
Airlines seem to go the extra mile to make customers feel gipped. On a recent trip, U.S. Airways charged me $25 to check one bag. As I was checking in for a redeye from L.A. to Boston, United Airlines offered to upgrade me to a seat with a few more inches of legroom for $25. When planning this trip I used a search engine that showed both the airlines' stated prices and the real prices after adding on surcharges and fees. In some cases the real price was nearly double the stated price.
Craig Mee comments:
Another twist on this is completely the opposite: 'pay what you think it's worth.'
The example I link to is in kiwi land, but I've heard exactly the same happening in London, and with the manager staying most of the time there in front, while their people look after them. If I ran the restaurant, I'd just make sure that the tables were as far away from the exit as possible, so anyone who tossed you five pence had the walk of shame to deal with it (i.e the opportunity for waiting staff to throw them that knowing look of "thanks for nothing").
Vince Fulco writes:
Most recently while shopping for multi-monitor video cards from numerous manufacturers, critical cables for the interfaces were not included. They easily added 30% to the overall cost, and I assume the resulting markup is many times greater vs. if everything were included with the device itself.
There seems to be a not too subtle attempt at teaser prices even in more traditional venues. Southwest Airlines is a great example. New to Minneapolis, they're heavily advertising their summer fares to Chicago for $49 among other attractive deals. Not surprisingly, any 'deal' requires traveling at the worst possible times and multiple interim stops; sometimes as many as three or four. Not a way to start a relationship with newer customers and a disconnect from their message of being clear about the total prices vs. the other guys.
Another current example is a regional furniture company advertising all products at 77 cents on the dollar. What marketing psych service advertised the switch from the old N% off sale? It doesn't resonate well.
Marion Dreyfus adds:
Take advantage of the numerous specials in travel now, especially pre-summer. TravelZoo offers a raft of deals that are good, though you are warned about taxes that can make a huge difference in the stated to real price. Also note that some fail to include key variables that change the price. Departure days can be irregular, inconvenient or uncomfortable, double occupancy at a hotel may be expected. You may be expected to rent a car.
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My local taxing authority changed the method real estate assessed valuation is determined. This year, instead of the long standing policy of valuation being based on an annual assessment, a new police was surreptitiously implemented. Now, a three-year average of the annual assessed valuation determines the amount of property tax assessed. Put another way, 2/3 of my property tax is based on a valuation that is 20% higher than the current market value of the house. This chicanery, combined with rate increases, and what is euphemistically termed an equalization factor, which is a redistribution scheme that has more affluent areas paying a higher percentage rate, has resulted in my real estate taxes increasing in each of the last ten years.
During the ten years I have resided in my current home, my annual real estate taxes have increased 252% to 2.37% of current market value. My local government refuses to relinquish any of the windfall tax receipt levels resulting from the housing bubble.
I see things have changed dramatically since I entertained in NYC in the early 80s.
At first glance, I thought the dinner was priced in Yen. Then I began to research Masa. I notice that all their food is flown in from Japan including their fish and beef.
So I have a few questions. What did you eat? How much of it did you eat? In your opinion, was it worth it? If you have the option of spending $600 a meal including tip and tax would you do it again?
Next, I notice that you could have eaten at Masa Bar for considerably less. Do you regret not making this choice?
Third how much of a tip if any did you leave? I believe Masa himself serves you so if this is the case, does the 20% effectively cover the tip?
Fourth, did you wear your outrageous sport coat and did you wear socks?
If two soft drinks were consumed, do they allow free refills, and what did the other three people drink?
Finally, do they have a children's menu?
That must me a New York thing, it hasn't hit the deep South yet and word has it that all rich New Yorkers, well those making 250k, will soon be moving to the deep South to avoid the Obama sin tax of trying to earn more than 250k… The robins are moving South where the worms are plentiful… for now anyway…
Vince Fulco:
You are 100% correct about the cable phenomenon. It's true for printers as well as cables.
Deep Surplus doesn't advertise, and they sell monitor, USB, Ethernet and other cables for $1.99 — which cost 10x to 20x more in the retail stores. Once every year or so, we order a ton of cables and connectors as inventory from them — the savings is mind-boggling. (And with 0% interest rates, there's no cost of carry either!) To make the experience especially sweet, they include a free bag of Skittles with every order!
I've noticed cereal boxes are becoming narrower in width while prices are still going up.
Also at my annual physical my doctor wanted me to come back a second time for a stress test saying there wasn't enough time to do it. I instictively knew the real reason was to bill my insurance for another procedure. I insisted that it be done this visit which is was.
Tea Anyone?
All this is China — the article and the ensuing commentary.
Only here it is a science practiced as an art form.
Part of my reasoning for moving to China was to understand that dark, nontransparent (or, until after you get the bill that first time, at least “not so apparent”) side that “operators” of commerce, finance, and investment (notably banking) thereby conduct daily standards and practices.
What does he say to Bud Fox, who is about to walk into his office and be arrested?
“Money makes you do things that you don’t want to do.”
The lesson?
In America, we have reciprocity; accordingly, we should ever strive, even fight to keep and protect it. The Boston Tea Party comes to mind here, though being an act of civil disobedience. So you organize a public boycott – yes to include Masa.
Fortunately, now we have “the law.”
Or do we?
Is the 20% a service charge or an administrative fee – and was that clearly stated on the menu upon presentment, prior to ordering?
You can file a complaint with the better business bureau or with the attorney general for deceptive business practices…
Then, again, you can just stop going there. Others will say that, if you have to ask or protest, you should have not been there in the first place…
Regardless of the stylistics, history so instructs…
From all that we have witnessed and as has been reported in the “coming to light” with the “crisis” of present, clearly we understand why this time period may be considered so – a crisis. The question…
Will there be an ever increasing public awareness that what “we” have been doing constitutes a detachment in our understanding of what we thought we were doing – as well as with regard to the reasons why?
Bailout or bail in (the harbor), I ask.
dr
We are going to Houston in July and need to rent a car for a week. While seeking quotes on three different (major) car rental websites I accidentally entered an incorrect pickup time of 11:30am. When I noticed and changed this number to 1:30pm the prices on all three sites jumped by an average of 30%. I went back and repeated the earlier pickup time to see if it was a fluke and then moved the time up by 15 minute increments until the price jump occurred. Is it unethical for me to state an earlier pickup time and arrive late? Will the price quote be upheld? Is this pricing system just a matter of supply and demand?
I have yet to see the review of Masa and am intrigued as to the rating. I researched it online but would like to read from someone firsthand.
I found these quotes: 'I have the simplest taste. I am always satisfied with the best.’ Oscar Wilde. 'There is no sincerer love than the love of food.’ George Bernard Shaw.
Steve writes “If you have the option of spending $600 a meal including tip and tax would you do it again? ”
Victor long ago graduated from the world of buffets and minimum wage poker, and now he dines with the big boys.
No. I would not do it again, but it was the best sushi meal I've ever had. I wasn't served by Mr. Masa. The bill originally posted was from another disgruntled customer, not mine. His bill reminds me of the classic Columbo episode where he's dining at Chassin's with a rich perp. " NO , I'll pay for my own. I'll have a chili". "What — $25??? for just chili". " Oh we're sorry, we forgot the coffee. That will be $7.50 extra for the coffee making it 32.50. ". The cokes on that bill were funny. They did adjust me up for a single portion of 1/4 ounce of a special better-than-Kobi beef that cost 150. I don't like getting gypped and I like to have economical habits. The Masa thing was a once in a life time thing. And if I had know it was going to be $1400 for two in advance, never would I have gone. Even now, the gypping and the total overwhelm my enjoyment of what would have been a superb meal, especially the white fish, prepared similar to the baby eels of Spain. vic
I showed a friend of mine this post and he sent me back the following…
This is from my standard contract boilerplate:
"…These changes outlined above may be made without relieving or releasing the Contractor from any of his obligations under the Contract provisions, and without affecting the validity of the guaranty bonds, and without relieving or releasing the surety or sureties of said bonds. All such work shall be executed under the terms of the original Contract unless it is provided otherwise.
An allowance of 20% will be added for overhead and profit to "gross cost of labor" and "Net Cost of Materials" and is hereby stipulated to be in lieu of an actual determination of overhead and profit. The Contractor in submitting his bid agrees that this allowance shall be used, regardless of whether actual overhead and profit is more or less than this amount…"
This is used only when "extra work" is encountered out of the scope of work. I'm not saying a service charge isn't sometimes warranted. Italy has its 'Pane e Coperto', but that’s like 2% and is always clearly stated on the menu… but Masa has some set of stones making a big deal by lowering their price $100 bucks and then nailing ya with a hundred on the back end!
The Laffer Curve works very well with all businesses. The more you try to extort from the customer with short sighted increases, the less the incentive to come back. Revenues decrease as the restaurants try to sneak in extras by increasing rates, especially when they're disguised. It would be nice if certain other parties were to realize that increasing rates only leads to mobility and less incentive to work, thereby reducing the total. A human is not an oil well ready to be depleted with pipe at the leisure or expediency of the driller. vic