Wednesday, February 20, 2013

The trouble with free

It's been observed many times, and in many different places, that people often behave abnormally when they hear the word "free." Emily Guy Birken discusses the problems with "free" stuff in a recent post on the Live Like a Mensch blog, and behavioral economist Dan Ariely devotes an entire chapter to this phenomenon in his book Predictably Irrational. In one experiment he describes, college students overwhelmingly choose a free Hershey's Kiss over a 15-cent Lindt Truffle, yet when the prices of both candies are raised by one cent, they overwhelmingly prefer the truffle. A penny is still a trivial amount of money, but because it's not "free," it allows the students to perceive the transaction as a financial one and analyze the costs and benefits accordingly. He also talks about how Amazon greatly increased its sales when it started offering free shipping on all orders over $25—except in France, where it reduced the shipping charge on large orders to 1 franc (about 20 cents) instead of cutting it to zero. Even though this is still a negligible cost, it didn't have the allure of "free"—that tantalizing promise of getting something for nothing that can have the paradoxical effect of persuading people to spend more than they intended.

My own observation, however, is that the problem with "free" stuff cuts both ways. That is, not only can the promise of free stuff lead to poor decision-making, but an offer of a free item can also backfire on the giver.

Case in point: our old blender, which I listed on our local Freecycle group after we replaced it with a newer one from Craigslist. (Side note: I put the new blender to the test using this homemade Frappucino recipe, and I found that it performed admirably, actually doing a much better job of grinding up ice cubes than our old one. I also noticed that making this recipe with pectin rather than xanthan gum, which I couldn't find anywhere, doesn't seem to help much at keeping the drink from separating, but that wasn't the blender's fault.) Being a scrupulously honest person, I made a point of noting in the Freecycle listing that the blender's collar was cracked, so I feared that we might not get any takers. However, within just a couple of hours of the post, I received an e-mail from a Freecycler who said she was interested and could pick it up on Sunday "after 11 am."

When the Freecycler hadn't showed up by 2:30, I thought that the treacherously high winds we were having might have interfered with her plans, so I e-mailed back to inquire if she could still make it. She said she'd had car trouble and asked if she could come the next day "after 4:30 pm." Although I was a bit annoyed by her vagueness, I decided not to press for a more specific time commitment in the interests of getting the blender out of here. But as it turns out, it didn't matter, since she never showed up at all. Moreover, although she had both my e-mail and my phone number, she never bothered to contact me to explain why she couldn't make it this time.

Would this person have been so cavalier about her promise to me if she'd been proposing to buy the blender, rather than just take it for free? Based on an earlier experience of Brian's, I suspect not. Back when he was preparing to move out of his old apartment in California and move out East, he had to get rid of most of his belongings, so he listed several items on a message board at his workplace—some for sale, though at fairly modest prices, and others for free. The people who arranged to buy things, he says, invariably came when they said they would come, paid what they said they would pay, and left. However, the people who offered to pick up the couch he was giving away never came at all. He got multiple offers, but not one person actually showed up or bothered to send so much as a word of explanation. In the end, the couch wound up on the curb with the trash, because no one who promised to take it could be bothered to keep that promise.

This experience convinced him, and has since convinced me, that people just don't take a transaction seriously when there's no actual money at stake. If they've arranged to buy something, then they feel they have entered into a contract, and they won't break that contract without a good reason. But if they are merely taking something for free, then as they see it, there is no contract. Their reasoning, conscious or unconscious, seems to be, "Well, I wasn't going to pay anything for it anyway, so if I don't show up, it doesn't cost him anything." I suspect that if Brian, rather than giving away his old couch, had offered to "sell" it for a dollar, the people who offered to take it at that price would have showed up as promised with dollar in hand. (Of course, it's also possible that no one would have offered—but at least in that case, he wouldn't have had to waste time waiting around for a bunch of no-shows.)

The logical conclusion from all this might be that if I want to get rid of the old blender, the thing to do is to try selling it for a dollar, or some other nominal price, rather than Freecycling it. But since the majority of people I deal with on Freecycle actually do show up as promised, or at least give a good reason if they can't, I think it's worth taking one more crack at giving it away first. I've added a listing to the larger Middlesex County group, which reaches more people than the smaller Rutgers University group, and already I've had two requests for the blender. This time, I'm planning to leave the item out for "porch pickup" rather than try and schedule a specific time for the transfer. I'm hoping this will make the process go more smoothly.

However, it is rather interesting that two people (three, if you count the one who never showed up) actually want a blender that I candidly admitted is broken. True, only one part is broken, and it only costs about five bucks to replace that part—but as we discovered, it also only costs about five bucks to replace the entire blender with a secondhand one. It seems to be yet another example of the power of that word "free": people who wouldn't pay $5 for a secondhand blender will eagerly snatch up a "free" blender that needs a $5 part.
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