Image for post
Image for post
Photo by osde8info

Yesterday, as we waited to play mini golf in an arcade, a mom looking after a group of kids handed me and my family a pile of tickets “please have these… my kids have had too much sugar already and we won’t be able to use them.” I responded with a thank you and accepted the tickets. Keeping two young girls patient during a 50 minute wait in a room filled with flashing lights and alarms was a test of endurance and I needed to constantly distract them.

However, a new stress started to take over. How to spend these tickets? We were pretty good at not giving in to buying tokens for the arcade and to aid that, we were constantly looking for new activities.

The value for the tickets was pretty abysmal. There were some plastic rings that could be traded for 30 tickets. We had 38. Eventually, we redeemed our 38 tickets for a 40 ticket value cherry Laffy Taffy (they rounded up). As I was splitting up the 5g taffy into bite sized pieces for the sisters to share, I thought about a rare stress — the stress of plenty.

I thought about it again today. Shoppers runs sales on points redemptions for the PC Optimum program and I had a lot of points. Maximizing points could add an additional 40% in value for the number of points I had. It was “stressful” trying to plan out purchases for household items I might need.

Our quality of thinking degrades when we add stress to the mix, especially if that stress is around an exchange of value. A great example of this is Kahneman’s experiments with financial incentives (spoiler: large incentives do not lead to better performance and more so when creativity is involved). If Loblaws needs to reduce their liability of unused points, maybe it puts on this sale in the hope people will make poor rushed decisions that leave money on the table (or lead to more revenue because you need to buy above the redemption amount).

I’m curious how companies that offer points or miles for redemptions run experiments against consumers to maximize breakage. Do they model to determine the maximum breakage before leading to a customer revolt? If so, what chance do most consumers have in fighting this? Is there a market for the equivalent of “private security” in hiring a service to maximize what we can get from the companies we engage with the most and to be constantly vigilant against them?

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store