Inefficient Incentives


My wife received an email that a dress she had her eye on was on special (down from $279 to $79 – the reason I’m mentioning the price will become clear shortly).

She checked it out on their site and added it her cart (she knows her size with this brand).

She went through to checkout and was informed of the shipping charge (not insignificant) and encouraged to add more to her cart – the free shipping kicks in at $100.

She checked the returns policy – yes, free returns by reply paid mail (ie no cost at all to her to return any item).

She calls the store to check – basically saying that in order to get free shipping she is thinking of simply ordering two of the dress and then returning one – do they have another suggestion, or can they just give her a coupon for free shipping so she doesn’t waste everyone’s time and money with the returns process?

They don’t have any other suggestions.

On some life hacking sites, this would be an ‘amazing savings hack’, but for us this is example of waste and inefficiency.

For the brand it seems like an incentive to purchase more (and I’ll bet some boffin in marketing is looking at the average order value stats and giving themselves a big pat on the back), but for society it is inefficiency (masked in the noise of economic growth).

How can we incentivise efficiency instead?


  • Is it any wonder that our postal service has so many delays – I wonder how much of the Australia Post capacity is wasted with unnecessary returns
  • Further, is it any wonder that Amazon Prime is so popular – the free shipping on most things (no matter the cost) makes ordering so much easier

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By Craig Bailey