Tuesday, February 22, 2005

It's been bugging me for three days 

Ralph at Division of Labour continues to wonder about rebates. I have been wondering about something I saw Saturday. Driving back from the Cities, I was having a coughing fit thanks to the creeping crud (CC) that Mitch gave me. I decide I need some DayQuil, as Five Days of the Zinc had ameliorated some but not all of the symptoms of the CC. I'm also called by Mrs. Scholar from the hospital with her mom, and told I have to eat there with her. Since hospital food sucks, I figure I'll tank up beforehand.

So I go to a Walgreens in Maple Grove and stand before the dizzying array of cold remedies. Next to the DayQuil is the Walgreens knockoff. "Buy 1, get 1 free" says the sign. But I really only need a couple days of dosage, since I'm pretty sure I'm on the downside of the CC. I look closely: "$3.49 for 1, or buy one get one free" and the regular price is in fact $3.49. The NyQuil knockoff is priced the same way. I grab two of each.

At the counter I ask, "So if I buy one it's $3.49?" "Yes." "And if I buy two?" "Same price." Yet the cashews are on sale -- remember, I'm hungry too -- and they are priced $5.99 for one or 2/$10.

Question: What accounts for the difference in pricing? And what does Walgreens gain by pricing the cold remedies in this way? One possible answer: They are paying you to store the cold product, since winter is ending (at least for most places, if not in Minnesota) and demand for cold remedies will wane shortly. Somehow I don't think that's the right answer though, and I'm stuck. Your suggestions?

Of such thoughts are an economist's day made.