Is this morally wrong?

[Brett]

Came across a website today that offered a service (which is somewhat common) that I had never really thought about before in any deep way. I have formed my own opinion on the matter, but interested in hearing what others think.

So, the business sells consumer goods, everything from food and clothes to toys, tools and electronics via direct marketing with a focus on the hire-purchase model of sales, ie buy now pay 'X' $$ per week.
They take a product, say a mobile phone worth $100 through a usual outlet and basically double the price (ie underneath the item say total value $200). They then double the price again and add on a $10-$40 administration fee (not unusual for companies allowing terms of credit) and divide this amount by 50 weeks to allow for a per week payment rate.

Maths for the $100 phone would be:

Value: $200
Weekly payments $8.30
Consumer gets their $100 phone now, after 12 months they have paid $415.

Now clearly a business like this is not targeting a "thinking" individual (unless they own nothing and know that they are going to die within 12 weeks time leaving no estate to be claimed upon effectively leaving them with a situation whether they get a product at below cost...but that is an aside). A fairly prudent shopper would double check the price with the competition, add up the weekly payments over the 50 weeks and decide whether they think are happy with the deal.
I struggle with the concept that anyone would be happy paying 4 time what something is able to be otherwise purchased for simply for the convenience of having it NOW.
However, these people must exist because this is not a small company and they have been around nearly 10 years. I can only deduce that they are not the most educated people and given that it is a HP based model, they are counting on their customer base to not have the means to pay for it at present and thus have to pay it off, generally both the education and fiscal means points point to....lower decile populations. PC for Maori and Pacific Islander communities as well as poor Pakeha.

What do we think about this? Is this business exploiting the less fortunate, is this just a semi-sharky but ultimately ok venture or is this a perfectly viable business making an honest earning. (after all the business is taking the risk here that the consumer buggers off with the good, makes no more than the required 2 up front payments and then ceases to make any further payments and is then potentially has to file the customer into bankruptcy even though they probably have nothing left to help defray the costs).

Love to hear your thoughts KB.

[Bald Eagle]

Sounds a bit like the sort of deals our governments been doing with our assets and Kiwi saver - not wrong , just business.

[imdying]

I struggle with the concept that anyone would be happy paying 4 time what something is able to be otherwise purchased for simply for the convenience of having it NOW.Given that you can't buy more time, it could be considered value for money.

[racefactory]

The idea is an abomination to me. The whole hire purchase and getting in debt is what's wrong with our western culture. Even financing for a vehicle etc... what the fuck is that? If you don't have the money don't buy it.

Consumerism. We always just have to have the latest Ipods, the newest shit, right now... pay later. It's disgusting.

There are blames to be had from either side but the regulations make it so easy and the weaker people unable to resist temptation just end up fucking themselves over and become destroyed by these businesses.

[Brett]

Given that many of our local stores put 800 percent mark ups on our everyday items, 400 percent isn't exactly outrageous...

[Edbear]

Given that many of our local stores put 800 percent mark ups on our everyday items, 400 percent isn't exactly outrageous...

Wish I could do that! :blink:

[Usarka]

I think it's wrong from both supply and demand sides of the equation, but it's also how things work in a wonderful capatilist society.

Those dole bludgers, rednecks, thicko's and old coots are risky bastards though, i wonder how many debts this company has to write down or off.....

[Brett]

I think it's wrong from both supply and demand sides of the equation, but it's also how things work in a wonderful capatilist society.

Those dole bludgers, rednecks, thicko's and old coots are risky bastards though, i wonder how many debts this company has to write down or off.....

I would imagine...a lot. Bad debt must be massive. However, if done via the correct procedures, bad debt can be written off by the business

[HenryDorsetCase]

could I pay like $15/week and get a brand new Street Triple R. I'd even double the term, so $15/week for two years.

Hook a brutha up, huh?

[Brett]

could I pay like $15/week and get a brand new Street Triple R. I'd even double the term, so $15/week for two years.

Hook a brutha up, huh?

Mate, make that two of us :)

[CookMySock]

not wrong , just business.Theres nothing stopping any person offering some product or service in exchange for money. If you can lure someone into a contract then you have a contract. Morals aren't a part of it, and are only useful to persuade susceptible people into doing what you want, ie do it my way or society will judge you.

[Ronin]

Given that many of our local stores put 800 percent mark ups on our everyday items, 400 percent isn't exactly outrageous...

Erm, like who... On what...

[Ronin]

Theres nothing stopping any person offering some product or service in exchange for money. If you can lure someone into a contract then you have a contract. Morals aren't a part of it, and are only useful to persuade susceptible people into doing what you want, ie do it my way or society will judge you.

Ahhhh HA! I've worked it out. You've gone off you meds aye?

[Brett]

Erm, like who... On what...

Placemakers, Bunnings, Mitre10, Repco, Supercheap, Kmart, The Warehouse to name a few. Not across the board on all products, but certainly on some pretty good accessory and parts lines.

[Gremlin]

Well, if everything is laid out, and a normal person can put it all together, then it can't really be classified as misleading or false (those sort of things I have a problem with). Therefore its simply down to the buyer deciding if they accept the terms, as they are not being forced into it.

Much like whatshisname with the shares. He offers a low ball offer, if people did a quick check online, they would see the offer is low. Then he offers above, but doesn't have to pay for 10 years. That in itself is not technically illegal, but then he deliberately targetted the first campaign at Christmas, when more businesses are off on holiday and money is tight. It points to his thinking. He was definitely morally wrong, only slightly illegal, and he's being chased.

For the HP... well, people can walk in any time, and I wouldn't have a problem if the terms are all pointed out. A fool and his money are soon parted.

[steve_t]

It's fine to have that business model AS LONG AS you are very clear with the customer about the terms of the contract. That is, you need to inform them of fact that their total repayment equals $xx. The biggest issue has been not the fact there is high interest but that some people are calculating and compounding interest daily/monthly. If you give people all of the information and they still want to sign up, that's up to them. Your contracts should include a waiver to consult with a lawyer if they don't want to do so.

[steve_t]

Well, if everything is laid out, and a normal person can put it all together, then it can't really be classified as misleading or false (those sort of things I have a problem with). Therefore its simply down to the buyer deciding if they accept the terms, as they are not being forced into it.

Much like whatshisname with the shares. He offers a low ball offer, if people did a quick check online, they would see the offer is low. Then he offers above, but doesn't have to pay for 10 years. That in itself is not technically illegal, but then he deliberately targetted the first campaign at Christmas, when more businesses are off on holiday and money is tight. It points to his thinking. He was definitely morally wrong, only slightly illegal, and he's being chased.

For the HP... well, people can walk in any time, and I wouldn't have a problem if the terms are all pointed out. A fool and his money are soon parted.

Dirty old Whimp was not upfront with his offers. If he had been, he'd probably have been OK

[tigertim20]

I don realy see the issue, there is a competitive market out there. People make the decision to buy now, or save the cash, and buy later.
This is absolutely NO different than a Mortgage. Do the maths on that, a 20 year mortgage, on a house worth 300k, what does that work out to?
A fucking lot, however, that is exactly what society expectsnormal individuals to do, grow up, get a job, and get a mortgage, and pay hundreds of thousands more for something than what its worth.

Its also the same as any market situation, where a new product is released. lets take hire purchase out of it, and look at cash purchases. I remember the Playstation 2 coming out, and it was alot of money. Many poeple went out and bought the item on the frst day of sale for say $600. two months later, its normal price was only $350-$400. Its the whole 'keeping up with the joneses' anaogy. People are prepare to pay more later, to get what they want now. Its the same with buying a brand new item thats new on the market, and buying a second hand (or brand new) car, whatever.

It is always prudent to shop around before you buy. It is my expectation that the group you referred to as being 'targeted' should, as a function of need, be more likely to shop around, to ensure their dollar goes further. Yes I know that doesnt always happen, but iys what Id expect. Its a buyers perogative to spend when where and how they like.

[Brett]

I don realy see the issue, there is a competitive market out there. People make the decision to buy now, or save the cash, and buy later.
This is absolutely NO different than a Mortgage. Do the maths on that, a 20 year mortgage, on a house worth 300k, what does that work out to?
A fucking lot, however, that is exactly what society expectsnormal individuals to do, grow up, get a job, and get a mortgage, and pay hundreds of thousands more for something than what its worth.

Its also the same as any market situation, where a new product is released. lets take hire purchase out of it, and look at cash purchases. I remember the Playstation 2 coming out, and it was alot of money. Many poeple went out and bought the item on the frst day of sale for say $600. two months later, its normal price was only $350-$400. Its the whole 'keeping up with the joneses' anaogy. People are prepare to pay more later, to get what they want now. Its the same with buying a brand new item thats new on the market, and buying a second hand (or brand new) car, whatever.

It is always prudent to shop around before you buy. It is my expectation that the group you referred to as being 'targeted' should, as a function of need, be more likely to shop around, to ensure their dollar goes further. Yes I know that doesnt always happen, but iys what Id expect. Its a buyers perogative to spend when where and how they like.

I don't disagree with any of the above at all.

[HenryDorsetCase]

It's fine to have that business model AS LONG AS you are very clear with the customer about the terms of the contract. That is, you need to inform them of fact that their total repayment equals $xx. The biggest issue has been not the fact there is high interest but that some people are calculating and compounding interest daily/monthly. If you give people all of the information and they still want to sign up, that's up to them. Your contracts should include a waiver to consult with a lawyer if they don't want to do so.

There is a raft of legislation mandating just that disclosure in this area. Credit Contracts and Consumer Finance Act in particular.

But any munter signing up for $8.30 a week for a year won't read it. Like I say to the customers "I have to tell you, but you don't have to listen"

[Camshaft]

its not morally wrong as no1 is forcing you to do it.
if ur stupid enought to pay 415 dollars for a 100 dollar phone then its your fault. or on the flip side, if having tht 100 dollar phone right then and there is worth paying the extra money for thn thats at the individual purchasers discretion. i paid too much for my first real mountain bike as im a terrible saver, sticker price was 3k i paid 3500 as i slapped it on tick, i was 15 and had to have it, but i was fully aware that i was going to more than i should and did it anyway.

[Laava]

Cash next week?
Get cash now!

Ring any bells? Fuckin leeches if you ask me! If you ask my missus on the other hand, she will tell you that as a 23yr old widow with 3 kids under 8, the only way she could survive was with HP on various things like fridge s and washing machines! So HP has it's place as it goes but I am sure there are a load of people who enter into an agreement not knowing how much real debt they will accrue esp if they miss payments.

[steve_t]

There is a raft of legislation mandating just that disclosure in this area. Credit Contracts and Consumer Finance Act in particular.

But any munter signing up for $8.30 a week for a year won't read it. Like I say to the customers "I have to tell you, but you don't have to listen"

LOL. I'd imagine the line has to be "I have to tell you and you have to sign something stating that you understand what I just told you"

[HenryDorsetCase]

LOL. I'd imagine the line has to be "I have to tell you and you have to sign something stating that you understand what I just told you"

you should hear my spiel about trusts, or mortgages.

[Katman]

Chriscos have been doing it for years.

Yes, there's plenty of stupid people out there.

[scissorhands]

Business is the art of extracting money from another man pockets without resorting to violence. Max Amsterdam

That said, I believe our Governments should protect its people from scams, mainly through public education on TV

[steve_t]

Chriscos have been doing it for years.

Yes, there's plenty of stupid people out there.

Chriscos is even smarter because it's got a 300% markup on a Layby. It's not even HP! They don't have to front up with the goods for 40-50 weeks!

[Usarka]

Maybe the question should be reworded - do we have a moral obligation to look after the stupid? Why not, we seem to think we have to look after the old, the sick, the poor, the unemployed, the single parents etc....

[Brett]

Maybe the question should be reworded - do we have a moral obligation to look after the stupid? Why not, we seem to think we have to look after the old, the sick, the poor, the unemployed, the single parents etc....

Well that is a valid point to consider, DO we have a duty of care towards looking after other peoples well-being? I personally do not think that there is a yes or no answer to that.

[steve_t]

Well that is a valid point to consider, DO we have a duty of care towards looking after other peoples well-being? I personally do not think that there is a yes or no answer to that.

Where do you draw the line between looking after them and removing their freedom to choose for themselves? Should ATGATT be made compulsory springs to mind :innocent:

[Gremlin]

Well that is a valid point to consider, DO we have a duty of care towards looking after other peoples well-being? I personally do not think that there is a yes or no answer to that.


Where do you draw the line between looking after them and removing their freedom to choose for themselves? Should ATGATT be made compulsory springs to mind :innocent:
yeup... just how far do you go? Where does it end? It's the evil side of capitalism, but at least you choose (or you should)

[Blackshear]

I'll assume they drive a big red truck.

Never been a huge fan of the lolinflation that they slap on everything with easy payments. Sure a very small percentage might be that strung for cash etc but shit...
It offends me, but then again I'm offended by odd things.

Like DTR, those greedy motherfuckers...

[marty]

Follow in the Chrisco steps:

http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=10416709

[Mully]

I guess they're providing a service and offering a product at a price and people are agreeing.

Without having stupid people, we'd have no-one to compare smart people with.

[steve_t]

I guess they're providing a service and offering a product at a price and people are agreeing.

Without having stupid people, we'd have no-one to compare smart people with.

LOL. It's the real Theory of Relativity :sunny:

[marie_speeds]

My older single brother recently asked me to enquire about washing machine for him... god forbid a man ever go shopping for a washing machine :laugh: So as his work has been erratic last few years, sometimes boss has some sometimes he doesn't, he asked me to check deals on HP. After traipsing for a day around the various appliance stores. The deals and interest were just ridicuous. I laughed when they told me 30% interest, plus admin fees of $150.00 plus compusory insurance etc etc etc I ended up buying the machine for a cash disount price myself and told him to pay me back, as and when he could afford to given how erratic his work has been. I don't believe HP is a bad thing when it is absolutely necessary to get something urgently required, but I am a bit concerned by the fact that given the current consumer buying trend, these stores are now preying on vunerable people to make up for the loss in their profit margins.

[Oblivion]

The Hire-purchase agreement for some companies is just excessive. After a few years of regular payments, they can still end up owing more because of interest, when 3 months ago, they could 100% that shiny new GSXR-750 without HP. Its all for convenience methinks.

Like its already been said. There are no smart people without stupid people.

[Brett]

yeup... just how far do you go? Where does it end? It's the evil side of capitalism, but at least you choose (or you should)

Capitalism in its true form (as defined by economics) is where each individual unit (person, family, business etc) looks after their own interests and ensures that when it comes to a trade, that the cost paid equals that value (utility) returned. Thus in equilibrium, all parties to a trade are seeking to maximise their position and will only agree on a trade if both parties are better off to carry out such a trade.

In such a climate, those who are greedy would not get business because the other party in the trade would see no value in the trade. What we have now is either a case where individuals do not know or care about measuring valuing when looking at a trade or as was noted by someone earlier in the thread, the implicit value of being able to obtain a good worth $100 for $400 now rather than having to save for it is worth $300. That is an incredibly high premium to pay for convenience IMO.

[Mully]

What bothers me more is the people paying through the nose for nappies and baby formula.

Consumer electronics are never a good investment, consumable goods are worse.

I'm not convinced that some basic lessons shouldn't be compulsory prior to receiving Government assistance. (sorry, OT a bit) And yes, I'm making a sweeping accusation that most of the customers of these trucks are on Government assistance.

[Winston001]

If you ask my missus on the other hand, she will tell you that as a 23yr old widow with 3 kids under 8, the only way she could survive was with HP on various things like fridge and washing machines! So HP has it's place as it goes but I am sure there are a load of people who enter into an agreement not knowing how much real debt they will accrue...

Agreed. We borrow to buy houses and businesses because we need those things. You have to have a roof, and a way to make a living. So if you need a fridge, then hp is the valid answer.

[Winston001]

The thing is, most of us have no conception of life for some unfortunate members of our society. The halt, the lame, the sick, the naive, the different. People who just don't get it, and there are plenty.

A story: about a good-hearted older man earning sod all. He has a small collision and a $180 instant fine is issued. He can't pay, no savings. Pay it off? Well...sort of. He's waiting for the infringement to be prosecuted through the court, which means $40-120 fees added, and then he'll be able to arrange payments of $10wk.

I was struck dumb with the hopelessness of his situation. Yet he was cheerful enough simply accepting that's the way things are. He can barely buy food but would be straight over to help you.

[Brett]

Agreed. We borrow to buy houses and businesses because we need those things. You have to have a roof, and a way to make a living. So if you need a fridge, then hp is the valid answer.

Geez, trying to borrow money from the bank to borrow for a business is like blood out of a stone at present.

[superman]

These business models are everywhere. I wonder if it breaches general consumer rights where the price of the item must be reasonable to what you would expect to pay. However if this is a common in hire purchases through all businesses then it's just preying on idiots and wouldn't be a breach.

People have too much pride, if things are that bad that you need hire purchase food then just go into bloody WINZ and grab some food vouchers, it's not bludging if you are actually struggling to put food on the table for a good reason! Use the service you pay for!

[p.dath]

There is no monopoly present. The Consumer is free to shop around and choose their options. So I guess I don't have a problem with it.

Also you are only considering the gross mark-up on a low value item. The net realisable income is likely to be much lower.

[Banditbandit]

Business is explotative - that's the nature of Capitalism ...

[Brett]

There is no monopoly present. The Consumer is free to shop around and choose their options. So I guess I don't have a problem with it.

Also you are only considering the gross mark-up on a low value item. The net realisable income is likely to be much lower.

Same mark up applies to low cast as high cost items, only used the $100 phone as an example. The only reason the realised income might be lower is because of bad debt.

[p.dath]

The only reason the realised income might be lower is because of bad debt.

And

Building lease
Employment expenses
Tax
Insurance
Accountancy costs
Advertising
Rates
Power
Vehicle expenses


Actually, I could probably go on quite a bit longer, but you get the point. The net markup will be much lower the the gross markup due to all the expenses of running the business.

[avgas]

I struggle with the concept that anyone would be happy paying 4 time what something is able to be otherwise purchased for simply for the convenience of having it NOW.
Take any house price, say you put down 10% deposit - paying the remainder over 30 years.
Do a simple calculation exercise.....
How much in $ did it cost you for the house.

Admittedly a house COULD go up in value in that time. But its the same principal - only difference is that the banks are quite happy to wait for the money.

Same thing could be applied to car/bike loans etc
ALWAYS LOOK AT THE FINAL FIGURE OF TOTAL PAID......IT MAY PUT YOU OFF THE PURCHASE!!!
I did this recently for a friend, she had saved her 10% deposit and wanted to by a 400K home, I told her to look at a 200K home instead. We did the maths.
@200K, she had paid a final total of 290K, and had it paid off in half the time. At 400K she would take 25+ years to pay off.......and it better be a Million dollar home by the time she had paid it off ;)
She found a nice place for $260K.

[HenryDorsetCase]

Take any house price, say you put down 10% deposit - paying the remainder over 30 years.
Do a simple calculation exercise.....
How much in $ did it cost you for the house.

Admittedly a house COULD go up in value in that time. But its the same principal - only difference is that the banks are quite happy to wait for the money.

Same thing could be applied to car/bike loans etc
ALWAYS LOOK AT THE FINAL FIGURE OF TOTAL PAID......IT MAY PUT YOU OFF THE PURCHASE!!!
I did this recently for a friend, she had saved her 10% deposit and wanted to by a 400K home, I told her to look at a 200K home instead. We did the maths.
@200K, she had paid a final total of 290K, and had it paid off in half the time. At 400K she would take 25+ years to pay off.......and it better be a Million dollar home by the time she had paid it off ;)
She found a nice place for $260K.

again, Banks are mandated to disclose that stuff when you take out a loan. I love showing that part to the customers when they're signing up. :)

[Smifffy]

I HP'd the bike and have had two more summers of riding than I would have had if I had waited to save the outright price (assuming I would have had the discipline to reach the final sum.)

If everything turned to crap for me financially they could always repo the bike, but they'll never take away that last run I did over the Kaimais.

I knew exactly how much extra I was paying for the privilege of having it NOW. That was a price I was definitely prepared to pay.

For the record, I'm not expecting to default or have it repoed.

If I were to get some consumer goods and start to offer 'easy terms' at a margin much less than the OP example, and what point would profit margin go from simply business to morally questionable?

As for cell phones and ipods etc, meh. I'm more disgusted at the gouging that goes on for basics by the likes of Fonterra & Telescum.

[Winston001]

Business is explotative - that's the nature of Capitalism ...

People are exploitative - that's the nature of Socialism. :yes:

[Winston001]

Take any house price, say you put down 10% deposit - paying the remainder over 30 years.
Do a simple calculation exercise.....
How much in $ did it cost you for the house...



I know you are correct in theory but in practice people pay their mortgages much quicker than the full term. The average mortgage used to be paid off in seven years, possibly longer today.

The other element to remember is everybody has to live somewhere. You either pay rent or a mortgage. Its inescapable.

By contrast, most of us can survive without a vehicle, stereo, plasma tv etc. Borrowing money to satisfy want rather than need is the downfall of many budgets. Boring I know. :D

[steve_t]

I know you are correct in theory but in practice people pay their mortgages much quicker than the full term. The average mortgage used to be paid off in seven years, possibly longer today.

The other element to remember is everybody has to live somewhere. You either pay rent or a mortgage. Its inescapable.

By contrast, most of us can survive without a vehicle, stereo, plasma tv etc. Borrowing money to satisfy want rather than need is the downfall of many budgets. Boring I know. :D

Is that right? I'd been keen to see stats on mortgage repayment timeframes. I don't think I'll get mine sorted in 7 years. Also, so many people "upgrade" their houses before their mortgage is paid off and take out new mortgages so I guess the stats would be skewed. What age do people buy their first houses at these days? 30's? 40's? I don't know that many mid30-mid40's people that are freehold. It seems to be a while after that though most would say that they'd have paid off their mortgages much faster had their kids not been so expensive :innocent:

[Smifffy]

Is that right? I'd been keen to see stats on mortgage repayment timeframes. I don't think I'll get mine sorted in 7 years. Also, so many people "upgrade" their houses before their mortgage is paid off and take out new mortgages so I guess the stats would be skewed. What age do people buy their first houses at these days? 30's? 40's? I don't know that many mid30-mid40's people that are freehold. It seems to be a while after that though most would say that they'd have paid off their mortgages much faster had their kids not been so expensive :innocent:

I can't afford to have kids, since I have to pay to bring up everyone else's....

[steve_t]

I can't afford to have kids, since I have to pay to bring up everyone else's....

Getting a bit OT but did u see that article about that surrogate lady?! :blink::angry:

http://news.msn.co.nz/article/8236514/couple-ordered-to-pay-child-support-to-surrogate-mother-who-kept-baby

[FJRider]

I can't afford to have kids, since I have to pay to bring up everyone else's....

Work harder then ... there's more coming ... :shutup:

Bringing up the kids is one thing ... paying for the mothers smokes ... :sick:

[Smifffy]

Work harder then ... there's more coming ... :shutup:

Bringing up the kids is one thing ... paying for the mothers smokes ... :sick:

The truth is that working harder will not increase my income at all. Those days ended with the last millennium.

[Brett]

And

Building lease
Employment expenses
Tax
Insurance
Accountancy costs
Advertising
Rates
Power
Vehicle expenses


Actually, I could probably go on quite a bit longer, but you get the point. The net markup will be much lower the the gross markup due to all the expenses of running the business.

Well, the income is realised, it is just offest against the businesses costs, but yes, get what you are saying. Everybody is entitled to make a profit, no arguements there.

[FJRider]

The truth is that working harder will not increase my income at all. Those days ended with the last millennium.

Then go on a benefit too ... and we could bring you up too ...:gob:

[Indiana_Jones]

I can't afford to have kids, since I have to pay to bring up everyone else's....


Getting a bit OT

Not really, gonna have to agree with Smifffy.

And if a dumb arse boon wants to buy a phone on HP then that's all good with me, as long as I don't have to pick up the bill....but that's wishful thinking.

Some things make sense to put on HP if you need them, like a house or car/bike. Problem with my generation (generation Y-bother) is that they fucking want that 50" LCD TV now, not in a month or two, like it's their fucking birth right, cunts.

-Indy

[steve_t]

Not really, gonna have to agree with Smifffy.

-Indy

LOL. Yeah, I was meaning that my post about the surrogate woman was getting OT, not Smifffy :scooter:

[Indiana_Jones]

LOL. Yeah, I was meaning that my post about the surrogate woman was getting OT, not Smifffy :scooter:

Sweet as cunt!

-Indy

[Winston001]

Is that right? I'd been keen to see stats on mortgage repayment timeframes. I don't think I'll get mine sorted in 7 years. Also, so many people "upgrade" their houses before their mortgage is paid off and take out new mortgages so I guess the stats would be skewed. What age do people buy their first houses at these days? 30's? 40's?

Good questions and honestly I don't know.

I've read that the average mortgage in NZ is $120,000 and that more than half of homeowners have no mortgage at all.

[Brett]

Good questions and honestly I don't know.

I've read that the average mortgage in NZ is $120,000 and that more than half of homeowners have no mortgage at all.

Shit, wish my mortgage was $120k.

[BMWST?]

Given that many of our local stores put 800 percent mark ups on our everyday items, 400 percent isn't exactly outrageous...

800 percent....dont think so.Some of the small items at Placemakers etc will have 200 margin(400 per cent) but thats like 4 dollars for a bolt bought for 1 dollar.Bit you cant do that over the whole store

[steve_t]

800 percent....dont think so.Some of the small items at Placemakers etc will have 200 margin(400 per cent) but thats like 4 dollars for a bolt bought for 1 dollar.Bit you cant do that over the whole store

I'm told that a certain high value dinnerware brand in NZ has GP well into 4 figures. I'd also be surprised if this wasn't the case for stores such as Briscoes and Kathmandu that regularly have half price sales

[avgas]

I know you are correct in theory but in practice people pay their mortgages much quicker than the full term. The average mortgage used to be paid off in seven years, possibly longer today.

The other element to remember is everybody has to live somewhere. You either pay rent or a mortgage. Its inescapable.

By contrast, most of us can survive without a vehicle, stereo, plasma tv etc. Borrowing money to satisfy want rather than need is the downfall of many budgets. Boring I know. :D
So your saying its a need to own a home :corn: rather than rent.....

As for people paying mortgages off quicker. Everyone gets a wakeup call eventually - or else the remain in debt for their whole lives........

[avgas]

Good questions and honestly I don't know.

I've read that the average mortgage in NZ is $120,000 and that more than half of homeowners have no mortgage at all.
Probably has something to do with 50% of NZ renting.......

also that mortgage figure will be "home mortgage" not rental properties etc

Never trust a stat until you see how they measure it.

FYI National Home mortgage debt is around $20-30B
So that is what around 8,000 per person.........many of whom either don't own a home, or a under the age of 20......

[StoneY]

Erm, like who... On what...

Try Countdown and New World on Milk, butter and cheese (of course with assistance from those rougues Fonterra)

:P

[Ronin]

Try Countdown and New World on Milk, butter and cheese (of course with assistance from those rougues Fonterra)

:P

Would love to see the facts that show 800% I worked for one of the mentioned companies in inwards goods and the average GP wandered around the 27% mark.

[StoneY]

Would love to see the facts that show 800% I worked for one of the mentioned companies in inwards goods and the average GP wandered around the 27% mark.

Will have to see what the consumer folk come up with in regards the artificial inflation of milk prices and what they reckon after the inquiries

But you're right its probably nowhere near 800%... I was being a smart ass :p

However it is pathetic we have to pay full international rates for our local product, when those overseas get our milk for about two thirds what we pay...and they have to transport it there first!

I reckon this sort of business model here is at the least unethical. Cant say its robbery tho the participants go in with eyes wide open

[Brett]

800 percent....dont think so.Some of the small items at Placemakers etc will have 200 margin(400 per cent) but thats like 4 dollars for a bolt bought for 1 dollar.Bit you cant do that over the whole store

I did say on certain items, not a gross margin on their entire product mix. I know that many of the hardware stores run on 800% margins on some product lines. Happens with automotive parts all the time as well. Bare in mind, they are generally procuring their product direct from the manufacturer in some instances, so they get to incorporate the margin that a wholesaler/distributor would be taking.

Edit: keeping in mind that stores often run loss leaders too to attract consumers....

[Brett]

Would love to see the facts that show 800% I worked for one of the mentioned companies in inwards goods and the average GP wandered around the 27% mark.

My understanding is that generally the large volume grocery retailers don't have huge mark-ups at all, their model is (obviously) based on volume. I have an acquaintance who works closely with foodstuffs and progressive management, will try find out what the average mark up actually is for the supermarkets. Doubt it would be over 20% though.

[Maki]

They found a way to make people who are dumb pay for it. I don't see anything wrong. Maybe it will even help some of those people see the light and stop being exploited.

[Winston001]

Will have to see what the consumer folk come up with in regards the artificial inflation of milk prices and what they reckon after the inquiries

However it is pathetic we have to pay full international rates for our local product, when those overseas get our milk for about two thirds what we pay...and they have to transport it there first!


Yes we are all rather puzzled about this. Why a clear explanation of the supermarket price of milk hasn't been traced by journalists is difficult to know. Have just done a search and there is just the usual shock horror milk is expensive tripe.

So far as I can tell, supermarkets make more money per litre than the farmer, and Fonterra. The markup is 50-80%.

In Oz the farm price is the same but the supermarkets compete more which lowers the price.

Incidentally, people willingly pay even more to buy...WATER. The freaking stuff comes out of the tap for nothing. http://storyofstuff.org/bottledwater/

[KiWiP]

That's the moral compass.

If you have to ask someone else about whether it's right then you already know in your heart that it's wrong.

[HenryDorsetCase]

People are exploitative - that's the nature of Socialism. :yes:

bravo, beautifully put.

[Edbear]

bravo, beautifully put.

I thought it was the nature of people in general...

[Number One]

Chriscos have been doing it for years.

Yes, there's plenty of stupid people out there.

I always laugh when their ad ays 'smart mums join chrisco'...with a tag line like that they couldn't possibly be raping people for their products :rolleyes:

[steve_t]

I always laugh when their ad ays 'smart mums join chrisco'...with a tag line like that they couldn't possibly be raping people for their products :rolleyes:

"Smart and gorgeous mums" IIRC :shutup::shutup:

[ynot slow]

HP is ok with interest free,albeit check the booking fees etc.And beware if not paid off in time the interest will kick in literally.
At the moment you can get 50months I/F for all things electronic,is fine if you do the sums on repayments,not paying what they advertise as minimum.
Had a couple of mates in meat works,they like I/F and deferred terms,as they can buy and have payment holiday while the work is slow,once the season peaks they pay more,works for them.

[fuknKIWI]

CAVEAT EMPTOR
A fool & his money are soon parted:violin:

[Winston001]

I thought it was the nature of people in general...

To be exploitative? We are a social species. We are driven to join together and enjoy each others company. Tigers and crocodiles don't have parties.

Where it goes wrong is when there are too many of us and we lose personal connections. For example its easy to slag off beneficiaries but quite a different thing to slag off to their face a relative or friend who is having a tough time.

[wtf?]

Interesting poll.

Those that share my point of view have already stated it, but 1 question I have is

Of those that voted "No, its exploitation", how many of you vote Labour?

Is it coincidence the bar indicating the number of your votes is also red?

[StoneY]

Interesting poll.
Of those that voted "No, its exploitation", how many of you vote Labour?
Is it coincidence the bar indicating the number of your votes is also red?

Nope the Red is for 'No' on most polls I have participated in on KB

I for one dont think its ethical, but hey stupid people have always been a target for those willing to make a deal.
I dont think its really exploitation though

[steve_t]

Nope the Red is for 'No' on most polls I have participated in on KB

I for one dont think its ethical, but hey stupid people have always been a target for those willing to make a deal.
I dont think its really exploitation though

It's not ethical but it's not exploitation? :blink:

[Smifffy]

Do we need the nanna state to pass another law?

Maybe they can do it under urgency.

[StoneY]

It's not ethical but it's not exploitation? :blink:

Thats what i said....lol clear as mud ;)

If there are people dumb enough to volunteerily enter these contracts, its not exploitation
Still does not mean offering these deals is ethical.......