But, it’s not even price gouging…

I saw an article posted on social media that was churning the outrage machine. Perhaps you saw it too? The one about Best Buy charging $40 for a case of water. While there are some who would defend price gouging from an economics perspective, I’m not even going to do that. What happened at Best Buy is not an example of price gouging and should not inflame anyone who reads the entire article and knows basic definitions.

First, what happened? Best Buy doesn’t sell cases of water. But an employee realized there might be demand for entire cases, so he took the single bottle price and multiplied it by the number of bottles in the case to arrive at a case price. That would work out to $2.50 for a single bottle of Smart Water, or $1.79 for a single bottle of Aquafina. These are standard Best Buy prices. In Texas, price gouging is defined as “Selling or leasing fuel, food, medicine or another necessity at an exorbitant or excessive price” (taken from the Texas AG’s site). That is vague. Certainly, some may find $1.79-2.50 for a bottle of water “excessive” — it isn’t the cheapest bottled water I’ve seen. But the way of determining price gouging appears to involve examining whether prices in the “declared disaster area spike beyond what the normal market forces set.” Indicating that price gouging does require a raising of prices. Which Best Buy simply didn’t do.

The upsetting thing about people not reading is that this article has been a vehicle for virtue signaling. Anyone who argues with the premise that this is an outrageous example of corporate greed is derided as immoral, callous, or a capitalist.

If we buy the narrative that this was price gouging and someone was taking advantage of vulnerable people during a natural disaster (despite the previous discussion of the meaning of the term “price gouging”) then we have to ask ourselves “which greedy entity profited here?” The employee? Best Buy, unfortunately, doesn’t have a commission scale, so the employee who did the pricing didn’t see any profit. The pricing wasn’t done by or condoned by Best Buy corporate, so that’s out too. Looks like we don’t have a villain here.

Another relevant question: who was the victim? Did someone die because Best Buy wasn’t giving out water for free? Who goes to Best Buy to buy water, anyway?

So where is the outrage coming from? Is it really our mentality that enduring a natural disaster makes us entitled to bulk discounts on water from the electronics store? Unfortunately, it seems that what sells these days is outrage. If an article helps the reader feel moral outrage (and thus, morally superior), then they’ll click, share, vent, and really… what more could an advertiser ask for. Don’t be pawns. Save your outrage for something that matters.

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Selling to Saveya could be risky

Since there are so many gift card reselling websites, it’s good to know which ones are reliable, and which ones would be better to avoid. Saveya has some of the highest rates for reselling, but I am cautious about using them going forward because I, and several others I’ve talked to, have been having issues with them.

Shipping problems

I have tried twice in the past month to ship gift cards to Saveya because they had the best rates for reselling some gas gift cards. Unfortunately, all gas gift cards need to be mailed in. This is usually not a problem, but with Saveya, the same shipment has run into problems twice now.

Here’s the timeline on the first attempt:

August 14 – gift cards shipped to Saveya via USPS
August 18 – USPS reports “Undeliverable as Addressed
August 29 – USPS reports “Moved, Left no Address
Sept 12 – gift cards returned to me

I emailed customer service, and they confirmed that the address was correct, but added “I sent this to our fulfillment center to look into. I will say we always suggest FedEx and not USPS.” I had not seen or heard that suggestion anywhere before the email. So, I was told to ship it again — that there shouldn’t be issues. I tried again, with a printed address label — I had handwritten the first. FedEx? I wasn’t going to pay $9 or whatever, when my margin was already low.

This time, USPS reported that “no secure delivery location was available“. No secure delivery location at 11:25 on a Friday morning — seems strange for a business. No mail box, no front desk? The first attempt took more than a month — that should’ve been my lesson. But now I’m for sure done with shipping cards to Saveya.

Depleted gift cards

My friend sfoflyer had an issue with selling gift cards electronically. Here’s the story in his words:

I sold 2 GAP gift cards to SaveYa, and they required me to enter the card number and PIN to verify the balance of each card. After I entered them, their website verified that the gift cards had the correct balance. Since I received a confirmation email, I thought it was done deal and I just had to wait for my check in the mail. I received my check 4 days later, then a week later SaveYa charged my credit card $120. I called their customer service — they didn’t know and had no clue and couldn’t help, really the worst customer service. I filed a dispute with my credit card company, then 2 weeks later SaveYa emailed me that the reason they charged my credit card was because “one of the gift cards balance was depleted”. It doesn’t make sense, because they charged me the full $120, which is what I was paid for both gift cards. I called customer service again, but it was the same….all the reps were completely clueless and unhelpful. So I just have to wait and hope Amex sides with me on this dispute.

Staples bait and switch

Esther of ‘dem flyers tried to sell Staples gift cards to Saveya after verifying with customer support that they do accept mailed print-outs of e-gift cards. She shipped the printouts, and when Saveya received them, they emailed her saying “Sorry, we only accept physical gift cards” and shipped them back to her. Here’s her experience:

I was supposed to be paid 93% per card and I sent in 39 printouts. Took me 20 min to print them all out because I had to click each link in a new tab.

It was a one day only rate and I confirmed by email the next day that it was ok to match the rate because I had submitted the order and that I could send in printouts.

Saveya responded

The purchase order saveya-[…] has e-certificates.  I know we discussed this prior to you sending them in; however, our system only accepts codes, not e-certificates.  I apologize and will be sending these back via FedEx for Wednesday delivery.

Esther also notes that her experience with customer service is frustrating because despite her status as a bulk seller, they never respond to her first email, requiring her to follow up with a second email every time she has a concern.

Conclusion

If nothing else, dealing with Saveya could be a waste of your time. But, with their non-transparent policies on depleted gift cards (Do they do an investigation? Do they contact the issuer and not just the customer who may be claiming fraudulently that the gift card has no value?), it could be a waste of money too. With so many gift card reselling sites competing for business, Saveya will have to do a lot better to stay competitive. I hope that they will start by investing in a mailbox that USPS can access, doing thorough investigations before charging seller’s credit cards and making their rules clear and consistent.

Tidal: why Jay-Z and Taylor Swift are wrong

Jay-Z, along with Madonna, Kanye West and other thoroughly cringeworthy big names in music have launched Tidal, ostensibly to protect music, musicians, art. But this Instagram post from Madonna is telling. She says, in part

And remember nothing is for free! This is a universal LAW. Somewhere-Somehow-Someone has to pay.

Let’s not forget that this is also the woman who compares an album leak to rape and terrorism. How could such a person possibly be wrong about the future of music? I guess she’s in pretty good company though, as Taylor Swift (who is also on Tidal) pulled all her music from Spotify, saying

Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for.

But she and other artists who believe they’re being paid too little under the streaming model are wrong. Here’s why.

1. No one else gets paid forever for work they did once

Art is indeed valuable. No one is contesting that. But isn’t everything valuable? Nursing care, doctors, teachers, the guy who painted your house. The software engineers that make Google work, or the ones who maintain Wikipedia. All of their work is valuable. But does the engineer who wrote part of Google’s search code get paid $0.0006 every time someone does a Google search? Does the guy who installed your toilet get paid every time you flush it? Even if their work continues to be of value, even if there’s a measurable way in which it’s being used, most people do not get paid forever for work that they did once. What millionaire musicians don’t seem to realize is that they already enjoy a position of great privilege in the royalty system and they should be more grateful. It’s easy to understand why they aren’t: they see that Spotify pays 70% to the recording companies, which leaves a smaller share to them. But the answer is not charging the end user more money.

2. Making streaming more expensive will not increase revenues

The same applies to making streaming more difficult. If someone wants a playlist with all their favorite artists, but the artists each have exclusive contracts with five different streaming services, it makes life difficult. If streaming costs $20 per month, it makes the service less attractive. In fact, according to data analysis done by David Touve of the University of Virginia, the price of streaming that will maximize revenues is around $6/month.

3. Lost album sales is the wrong way of looking at things

Musicians just need to forget about the glory days when buying a CD or waiting around for the song to play on the radio were the only ways for a fan to consume their music. The metric of “lost album sales” is misleading. There’s no evidence that if pirating and streaming weren’t options, those fans would all be paying for albums.

4. The only way to increase revenue is to increase value

It should be fairly obvious that free or nearly free streaming and pirating are here to stay. It should also be obvious by now that fighting these (with encryption, lawsuits, shutting down sites like The Pirate Bay) are a temporary stopgap at best. If it’s easy to get free music, the only way to convince people to keep paying a premium price for it, whether via album sales or costlier streaming services, is to offer them something extra. Tidal claims it offers some exclusive content, but I think they’ll have to do better. Promotions like “buy this album and be entered for a chance to win a dinner with this artist” or “subscribe for N months and you can qualify to get these limited edition items” — things that freemium streaming and pirating don’t and can’t offer.

I’ll end with simple armchair psychology. If musicians alienate their fans by complaining that an estimated $6 million per year earned from Spotify is too little, fans will be less likely to care about “hurting the artist” by pirating.

In defense of harsher sentencing for crack

(versus powder cocaine)

It isn’t the least bit about race. Crack cocaine dealers have the same access to information about mandatory minimum sentences as anyone else, and if they choose to pursue a life of drug dealing, they can just as well switch to dealing powder cocaine. If a disproportionate number of blacks happen to continue choosing to deal one over the other, we’ll have to conclude either ignorance or stupidity.

Here’s why longer sentences for crack dealers is good: they deal in public. On street corners. Probably on the corner of a street where I used to live. One day I actually exited my building to see a body — someone who had been shot in the head on the (suspected) drug corner. That could’ve been anyone. In fact, it’s much more likely to be someone completely uninvolved because it’s in public.

I don’t really care if a drug dealer is going to someone’s upper east side apartment to deliver powder cocaine. Or their high rise office building. That’s a private transaction that has no bearing on me, and even if that drug user loses his job, his children probably won’t be the state’s problem. He’s probably not going to rob anyone. All that will happen is that he’ll get to go to an expensive rehab a few times. Not the same as when a highly addictive drug is popular among the poor: that increases everyone’s problems — the taxpayer (in the form of welfare, emergency room fees for the uninsured, food stamps, extra policing), the neighbor (armed robbery, burglaries), and even the random person walking in the street (muggings, gun violence/turf wars).

Mostly, I’m just tired of hearing this differential in sentencing trotted out as an example of racism in the legal system. Even if we ignore every point I just made, it still remains true that there was significant support from black leadership to enact these stricter sentencing laws.

Ferguson: more irresponsible reporting

I just read the NYT editorial on the Ferguson riots. Without doing their own fact checking, they quoted a “grim report by ProPublica” which claims that young black men are 21 times more likely to be killed by police than young white men.

That report is grim mostly for its failure to link original sources and its tenuous grasp on basic statistics. Let me attempt to improve on it. Their statement that young black males were 21 times more likely to be killed by police than young white men relies on numbers which they do not cite a specific source for. “Federally collected date on fatal police shootings” is as close as we get. In my own research, I have used the CDC Fatal Injury Reports. From the ProPublica report:

The 1,217 deadly police shootings from 2010 to 2012 captured in the federal data show that blacks, age 15 to 19, were killed at a rate of 31.17 per million, while just 1.47 per million white males in that age range died at the hands of police.

I’ve found a few issues with this statement.

1. According to the CDC data, there have been 1,454 deaths caused by police between 2010 and 2012, not 1,217 (excluding females, the number is 1,402). Additionally, that is the number for all ages, so it seems irrelevant if we’re discussing deaths of those aged 15-19: that number is 81 (79 if we restrict to males).

Screen Shot 2014-11-26 at 12.42.22 AM2. It is unclear from the above statement whether they are comparing all blacks age 15 to 19 to white males of the same age range, or if they’re comparing only males to males. I assume the latter because it makes more sense. In that case, the CDC website shows that blacks were killed at a rate of 6.6 per million, and whites at 1.5 per million.

3. That would make the relative risk 4.4 times as high, not 21.

I’m not sure how they reached the 21x figure, but I attempted to re-create this figure by selecting “homicide and legal intervention” for males age 15-19, but that gave a relative rate of 8.4. Then I tried that again, with males of all ages, and that gave a relative rate of 7. I welcome the authors of the ProPublica report to point me to the original sources from which they derived their relative rate of 21.

Conclusions drawn from this report seem to be unvaryingly of one flavor: we suffer from a problem of racist policing. However, here’s another interesting chart from the CDC data

Screen Shot 2014-11-26 at 12.47.52 AM

It’s the same data, but including males of all ages. Here, the black males seem to face twice the risk of white males of death by cop. But if we glance down a bit further, white males are at about twice the risk of Asian males. If we are to conclude, like the NYT article did, that

“These statistics reflect the fact that many police officers see black men as expendable figures on the urban landscape, not quite human beings”

Then I suppose we’ll have to conclude that police officers also see white men as expendable compared to Asian men. Or that the justice system was set up to benefit Asian men. Asian privilege? But if not, if these conclusions sound absurd, then might there also be room at the other end of the spectrum for more reasonable and less racially divisive conclusions? Any speculation you can give about why Asian men are at lower risk than white men should sound also reasonable when you apply it to whites versus blacks. Try that before saying what’s expected of you.

You could also read the grand jury testimony to get the full picture. Or, if you still believe this is an issue of racial privilege, I dare any white male to punch a police officer, attempt to take his gun, then charge him. I want proof that white privilege would have kept Michael Brown alive or seen to the prosecution of his killer. Show me.

Update: Looks like some people agree and ProPublica has had to print a defense of the original report.

Here’s an analysis similar to mine on a cop blog.

Now, if only NYT and other news sites would stop quoting the “21 times more likely” statistic as if it were the gospel truth.

Ebola and flight bans

I was curious why there haven’t been any flight bans since the ebola outbreak has landed in the US. A quick google search led me to a Time article [linked below] in which CDC director Tom Frieden says:

If we try to eliminate travel… we won’t be able to check them for fever when they leave, we won’t be able to check them for fever when they arrive, we won’t be able—as we do currently—to see a detailed history to see if they’ve been exposed

But this doesn’t make any sense. If we eliminate travel, they wouldn’t be arriving or leaving at all. Unless they swim? Or if they’re smuggling themselves over on boats? I’m sure that eliminating flights will greatly reduce the number of people who arrive here infected.

Further down in the article there’s an argument that there are no direct flights between the US and affected countries anyway. Which is why I would insist on closing down the airports of affected countries rather than simply banning flights. But I guess it’s possible exclude passengers with connecting flights who have originated in affected countries. Also, if the US institutes a flight ban, I’m sure many countries would follow.

It does seem the simplest way to avoid having an epidemic here. I understand why airlines wouldn’t want to — they lose money. I wonder what the real reasons are behind the CDC’s refusal to call for a flight ban.

Edit: I just found another article in which the author hypothesizes that the CDC’s position on banning flights may be due to a commitment to the ideology of open borders. Personally, I’m more inclined to believe that the director of the CDC is beholden to Obama (his position being an appointed one) and Obama being beholden to airlines and other big businesses.

Why Airlines and the CDC Oppose Ebola Flight Bans

Prop E

It’s a proposed tax of 2 cents per oz on sugary beverages (25 calories or more from sugars per 12 oz serving). Who’s in favor? Sounds like the entire medical community. Dentists, pediatricians, nurses, even hospitals.

Who is opposed? Of the 13 paid arguments against in my trusty voter guide, 11 were paid for by the American Beverage Association California PAC. If you can, I highly recommend that you read the arguments against. They’re droll. Things that I assure you the ABA doesn’t care about at all, but that they’re hoping you will. They argue all of the following:

  • The tax is regressive
  • Parents should decide what their kids eat and drink, not the government
  • Cost of living is already high in San Francisco
  • Obesity is a complex issue that requires a more complex solution
  • The tax hurts small businesses
  • Everyone’s grocery costs will increase

But they remain completely silent about what I’m guessing is the true reason they’ve spent almost $8 million on ads against Prop E: that it might hurt their bottom line. I guess the truth didn’t sound like a winning argument. Does anyone honestly believe that the beverage industry cares about any of the above points? No. The beverage industry is panicking over the tax because they think it will be effective in lowering soda consumption.

If there are any San Francisco voters reading this and you haven’t decided on Prop E, consider who has your best interests at heart. The entire medical community? Or the industry that sell drinks containing the equivalent of 10 tablespoons of sugar per can?