Have You Ever Counted The Number Of Sheets On A Roll Of Toilet Paper?

Sneaky Ways Companies Are Getting You To Pay More For Less

When I was a kid my mother would occasionally buy a gallon of ice cream.  YUM.  Today the gallon of ice cream is pretty much gone.  What was once considered the standard has gotten smaller.  The new standard of ice cream measurement is three quarts.  It happened slowly and very little noise was made about it.

Here’s how it all went down.  Prices for ice cream slowly were creeping up.  Ice cream sales were slowly falling down because of the higher prices.  Then some genius at one of the companies making ice cream came up with the idea of downsizing the container and dropping the price a little bit.  Consumers took the bait and the next thing you knew ice cream sales were on the rise.  The company was smart.  They promoted the new lower price and never mentioned the new smaller size package.  

Other businesses took notice and now smaller product sizes with the same prices are more the rule than the exception.  Take for example, my Barbasol Shaving Cream.  A few years ago it was a 12 oz. can for 99 cents.  Then it went to an 11 oz. can for the same price.  Today that can is now 10 oz. for a penny less than a buck.  I know somebody is going to say to me, “Hey, it’s only an ounce or two.”  Yep – that’s right. But think about it from the company’s point of view.  In every case of 12 cans sold 1 can was almost pure profit.

Here’s an even better example that was mostly kept under the radar.  H.J. Heinz, the ketchup people, pulled a trick that made them untold amounts of money.  Back in the days of glass bottles of ketchup, somebody at Heinz came up with an illegal profit making gimmick.  They put 7 ounces of ketchup in a bottle labeled 8 ounces.  Unfortunately for them, they got caught.  

Here’s how it all came down.  A woman was carefully following a recipe that called for 8 ounces of ketchup.  She got out a new 8 ounce bottle of Heinz and dumped it into a measuring cup.  Much to her surprise there was only 7 ounces.  She checked another new bottle only to find 7 ounces.  She went to the store and bought another one only to get the same amount.  She realized that every 7 or 8 bottles sold Heinz was getting a free bottle to sell.  She also realized, as a consumer, she was getting ripped off.  She notified the Federal Trade Commission who pulled an inspection on the plant.  Heinz quickly confessed to the sin, paid a huge fine, and quickly swept a potential public relations nightmare under the carpet.   In the agreement Heinz did NOT have to tell how long they were doing it or if any other products were involved.  By not having to disclose how long that practice took place there is the potential that the company’s profits FAR exceeded the imposed fine.  That being the case they could do it again in the future.

At the beginning of this I mentioned toilet paper.  Toilet paper is manufactured in a paper conversion factory.  Toilet paper is made in logs and then cut down to individual rolls.  It only takes about 8 to 10 seconds to roll a log of toilet paper.  By adjusting the roll width by ½ inch you could squeeze an extra roll out of each log.  The factory could make an additional 4 roll pack in less than 45 seconds.  Now let’s assume this is only 50 cents a minute in additional profit.  If the company had 5 toilet paper lines with 20 hours running time per line per day the yearly profit increase would be $109,500.  

This next item I am about to share with you is a sneaky way an insurance company can raise the price of your premium.  You may have seen this advertisement on television, where a representative of the company says the price of the insurance is only $9.95 per unit and guaranteed never to go up.  WOW, what an attractive offer, your price is guaranteed for ever and ever to remain the same.  Think about that.  While you are thinking, remember the old adage, if it sounds too good to be true it probably is.  Have you figured out the catch yet?  If not, let me help you.  The ‘Catch 22’ is in the use of the word “unit”.  The size of a unit is subject to change, and it’s pretty safe to say, the size of the unit will go down while the price remains the same, which in turn equals a back door price increase.  Oh, if this sounds a lot like the ice cream size gimmick I mentioned at the beginning, it’s because it’s the same.  Same price with a new smaller container.

In a previous blog, I mentioned the ever increasing world FEEs.  Here is the link to that blog goo.gl/M4bXk.  The world of the fee is a league of its own for varied and unlimited price increases.  

I’ve heard the argument, “I don’t worry about price increases.  It’s usually just a few cents.”  In some cases it actually is only just a few cents, but as any smart businessperson knows a few cents here and there add up to dollars and a few dollars here and there add up to big dollars.

That is the reason smart business people watch the pennies.  Pennies can translate in millions of bucks for a big company.  

Pennies at the consumer level may not appear to be much, however, that’s far from the truth.  Your pennies add up too.  

Think about this as an example - postage stamps were one time only two cents each.  Today, a postage stamp is currently $.46 and climbing.  During the day of the two penny stamp 1000 stamps would’ve cost you $20.  Today the same 1000 stamps would cost you a whopping $460, which is more than the cost of my car insurance for the entire year.  So there you have it, your pennies do matter.

Someday when you have extra time, just for fun, count the sheets on a new roll of toilet paper.  I sincerely hope you’re not surprised at what you find.


© Krystalco LLC 2013  Any publication or reuse of the information on this blog, in part or 
    whole, without express written consent is prohibited.

A NEW SPY TECHNIQUE AS BIG BROTHER STRIKES AGAIN

A Program of Dubious Value

If you followed my blog “Journey into Sunland”, you already know I’m not a big fan of NVEnergy. To be fair, in the past, NVEnergy had some worthwhile programs. The solar energy program offered by NVEnergy is fraught with problems and leads to finger-pointing between the company and the Public Utility Commission of Nevada. But that’s a discussion for another time.

This time around I’d like to tell you about the company’s newest offering which is already starting to short-circuit. The new energy saver of questionable value is called mPower. This latest offering provides you with a free programmable thermostat and free installation if you have a wireless router and a high-speed Internet connection. The promise from the company is it will save you money, however, after investigating how this operates I seriously question the value of the promise.

Oh, before you stop reading this thinking because you are in another state this does not apply to you, think again. Pacific Gas and Electric in California is working on a similar program with Honeywell, maker of digital programmable thermostats. At least two electric companies in the state of Texas are working with the EcoFactor and Nast Labs on Big Brother type ideas to track your electric usage.

About a week ago I had a flyer attached to my backdoor the described this new NVEnergy offering. If memory serves me right the thermostat is valued at $299 and the installation is $99 all for free. That word free makes my mouth water. That salivation stopped after I did some homework.

Before we get to the results of my research, let’s talk about the word value and the word free for a few seconds. As mentioned earlier, the declared value of the NVEnergy thermostat is $299. That number is based on the manufacturer’s suggested retail price and not necessarily what you would pay for an Internet programmable thermostat. I found several Internet capable programmable thermostats online for about one half the price of the NVEnergy thermostat. Then there is the installation value of $99. If you have basic skills and can read a schematic you can install the thermostat in about 15 minutes. The question then becomes, “is that worth $99?” My answer is I doubt it.

Now let’s examine the word free. Of course, the power company is promoting this as a free option. But keep in mind although the company wants you to believe it is free, it is actually being paid for by all of the NVEnergy customers that pay their bill every month. In the event this program falls flat NVEnergy will just go to the Public Utility Commission of Nevada and request a rate increase to cover the cost of the failed program.

The literature for the mPower program touts 10 to 15% savings on your summer cooling. I believe you’ll find like most sales literature, these numbers are slightly inflated and perhaps highly inflated when you consider some other factors.

If you have a regular thermostat and are not on any special money-saving programs offered by NVEnergy (such as the Time Of Use program), and you are willing to let the electric utility adjust your thermostat on occasion from their location, then at least 10% savings may not be out of the question. However, I do believe 15% savings would be a stretch. If you already own a programmable thermostat and use it wisely, along with being on the Time Of Use program you might have trouble realizing any savings.

Here are the basics of the program. The electric utility company installs a digital programmable thermostat in your home, which then feeds your program information over the internet to the utility company. The thermostat has four program settings, plus a setting for when you go away for a weekend or on vacation. You can also access this digital thermostat from utility company’s website and make changes to the program virtually anywhere you have Internet access. Admittedly, there are some pretty cool features with this (cool pun intended). Let’s say you forget to shut off the thermostat before you leave for a vacation and realize it while you are at the airport. If the airport has Wi-Fi access and you have your computer, you can connect to the website and shut off your thermostat. Kind of neat, huh? Now let’s say you come home from vacation and your thermostat is off.  Before you leave the airport to go home you can, once again, connect to the website and set your heater or air conditioner so that when you get to your house the heating or cooling process has already started.

Part of the money-saving factor is the utility company will ask you if they can, on occasion, adjust your thermostat a few degrees. Their literature says the few degrees won’t be noticed. Likewise, that is where some of the money savings is realized.

In the long run, the utility company is getting the lion’s  share of the benefits. Here’s how. The utility company is able to monitor your settings on the thermostat and the outside weather conditions. They can then gauge how much electricity you will use over a given period of time with your automatic thermostat. Now let’s say 100,000 people sign up for this program. They will be able to gauge the electric usage of all of those customers during a certain period of time. This means the energy company will be able to plan energy usage and buy or sell electricity accordingly and perhaps getting the best rate possible. This is definitely a plus for them.

A couple of things really bother me about this program. In order to get on the program at the NVEnergy website, you are asked to enter your account information and it will check to see if you have a digital smart meter. When I did that I got a message saying I was ineligible because I had an old meter. Their system was not intelligent enough to know that I have had a smart meter on my home for more than four years.

Then there’s the strange coincidence of the electric bill I just got this month. Normally I get an electric bill for 28, 29, 30, or 31 days. This month I got an electric bill for 64 days, which happen to be some of the hottest days of the summer. Around this time of year my electric bill is about $220 per month. Of course, with a 64 day electric bill the total was $445. That is still about $95 less than the average home my size pays for electricity. But, I guarantee a lot of people failed to calculate that they have not had an electric bill for two months and have already spent that cash. That means they’re going to come up short of cash, probably a little cranky, and it won’t be because of the heat. If NVEnergy’s system is not smart enough to mail me a monthly electric bill, how can I trust them to get this program correct?

The question really comes down to how much do you want your utility company to know about your electric usage habits? I know it really doesn’t seem like much, however, with all of the other ‘I Spy’ things going on these days, do you really want the utility company to be part of it? This is especially true when you can achieve nearly the same results by buying the thermostat yourself and not connecting it to the utility’s website. I don’t know about you, but I am particularly tired of Big Brother spying on everything I do.

Think about it. The satellite company or cable company can tell when you tune into porn. Of course, they can’t tell what you are doing while you are watching it. That is, at least for now.

© Krystalco LLC 2013  Any publication or reuse of the information on this blog, in part or 
    whole, without express written consent is prohibited.