Heya, 2p2.

A few days ago I read in a newspaper about this offer, which we could put it as a game. So... let's say it's a game. This game goes like this:

A supermarket runs a promotion. For every 10$ you spent in there, you get (beside what you bought) one point. These points are calculated by approximation through deduction and point fractions are not given (this means that if you spend 17$ you get a point. If you spend 21$, you get 2 points and so on).

For these points you can buy frying pans at a 50% discount. This means that for the desired frying pan you pay with the accumulated points and half the initial price, in cash.

The frying pans and their costs are those below:

1. Frying pan #1: initial price: 79.99$. You can buy it with 39.99$ and 10 points
2. Frying pan #2: initial price: 89.99$. You can buy it with 44.99$ and 10 points
3. Frying pan #3: initial price: 99.99$. You can buy it with 49.99$ and 10 points

Whaddaya think? Is this a +EV or a -EV game for the average shopper? Would you buy any of the frying pans this way?

Thanks.

Is it given that I need a new frypan?

What's a hypermarket, and do I shop there normally? Or is it a more expensive place to shop.

I spend $100 a week on groceries anyway, but the last frypan I bought cost $8. Not sure why I would spend 5x as much.

I think it's -EV, unless I need an $80 frypan for some reason.

Yes, you need a new frying pan. Otherwise this discussion would be useless.

A hypermarket is a supermarket. I also edited the original thread.

Let's say that this supermarket is you only option for both shopping and buying frying pans. I am only interested numbers-wise. I don't care that a frying pan costs 8$, 80$ or 1000$

Exchange the word frying pan for widget, then give your opinion again. Also assume you would have a need for multiple widgets, otherwise, you'd never consider buying multiple.

Say I average $14 to get a point. Then I am spending $140 for a $40 coupon. That's solid rakeback. With those particular numbers I'll do it assuming the $140 spending was likely.

Usually these things only make sense for the store if they alter the consumer behavior in some way. They tend to make sense for the consumer when you assume they were spending the money ayways.

yeah it depends on variosu factors - best case scenario i shop there already, can control my spending to max the points/$ and need a frying pan, otoh there's a worst case scenario where i don't need the pans, i wouldn't spend the money in the store otherwise and the stuff i would be buying is overpriced

why would you want more than one frying pan?

Ok, then yes, I would buy as many frypans as I need in this way.

With your constraints you have no choice if you want to eat or buy your frying pan.

The way to approach this is by looking at the total cost you will spend here compared to purchasing elsewhere. Say you need to buy groceries and a frying pan.

If the groceries are as good or better value (considering cost and quality and your personal utility) than any where else definitely buy the groceries there. Then if the discounted frying pan is a better value than alternatives, buy it there too.

If both the above are false then don't shop there.

When there is only savings on the groceries, buy the groceries there and don't use the coupon.

When there is only savings on the frying pan, you just have to crunch the numbers. Say you would save $15 on the frying pan, but you pay 10% more on groceries.

If you could do a big run and buy say $105 in groceries, that is 110% of what you would pay elsewhere, which comes out to about $9.50 is extra cost. (That is 105 - (105/1.1))

In that case you are saving over $5 so it is plus EV. You can derive a formula for the specific percentages or savings required in the fourth case to determine if it is +EV.

There is another sort of situation that is is very similar. At some stores, they run promos where say for every $10 you spend you get $5 in store coupons to use at a later date, such that you have to spend $10 to get the $5 off (so you are basically getting 50% off coupons up to a certain amount). These are usually not useable with any other offers. At what point is it better to use immediate discounts? What about when you can get more $5 store credits when you use your old ones (on the post discounted price. That is, you spend $20, get $10 off from your store credit, so your post discount price is $10 and you get a $5 voucher). Also what about when you get vouchers at a 1:1 amount (so spend $10, get a $10 coupon for the next time you shop and spend $20 or more, then get another coupon for the post discounted price rounded down to the nearest $5). This sort of thing I see a lot.

If you want to fry two things simultaneously but not in the same pan.

pwn3d

lol

amazing

what will they think of next

in all seriousness tho, and if we could avoid posting the obvious answer, why would you want more than 2 frying pans?

To have 2 frying pans for yourself and to give one to a relative for xmas.

epic

to reduce the incidence of out-of-the-frying-pan-into-the-fireitis

I think its only +EV if you are a regular at that particular supermarket

And its obviously only +EV if you need a frying pan, other wise its worthless and the customers probably wont shell out the money even if they have 10 points merely because they dont need said product.

As far as straight math, and assuming that all of the above variables are true, I think its +EV

Obviously the EV goes up as you buy the more expensive frying pan

Best case scenario would be if you were going to the supermarket to get your groceries, you spend $100, and you just so happen to need a frying pan as well.

Frying pan #3 is worth 10 points itself so if you bought 2 frying pans you are essentially getting buy one get one half off. Some customers love those kinds of promotions.

Clothing stores do that all the time.

EDIT: Wait are points calculated before or after sales tax? If after then what I just said isn't valid.

depends how much extra value you get from the better pan. Juist because it costs X, doesn't make it worth that much to you

Yeah I guess thats true too.

I suppose there isnt really enough info here to make an accurate assessment.

I'm disappointed you couldn't come up with a saucier answer.

are we talking pans on the shelf, or some kind of instore kioshk?

can i return the frying pan and get the full amount of money back

they're actually running something akin to this in tescos atm. What happens is, the woman asks 'are you collecting the pan vouchers?' and I answer 'no'.