Thursday, 26 December 2013
Reverse Shopping: The realities of American economics
Since the public start of the financial crisis in 2006, the talk has been about austerity, budget cuts, job losses, streamlining of the public administrations, et cetera, et cetera. Faced with astronomically growing public and private debt, the emphasis was put in reducing expenditure which directly led to loss of income for millions of families. This sudden reduction of buying power led to economic contraction with jobs losses followed by businesses failures followed by more job losses and more businesses failures.
Christmas time is a testing time. For thousands upon thousands of business both big and small, the Christmas sales are the difference between life and death. If businesses don't sell enough to have healthy balance sheets during the entire year, doom is unavoidable. So when Christmas time approaches, advertising companies go into overdrive and suddenly there are SALE signs all over the place on a 24-hour basis. Tempted by advertising and in a vain attempt to have some kind of optimism to counter their everyday frustrations vulnerable people suddenly go out and spend more than they can actually afford.
Aware of the Tsunami of debt that is created during Christmas time, a fast-food giant - MacDonald's - is advising its employees to return to the shops unwanted gifts as a way to recover some of the money they irrationally spent during the Christmas time. Returning merchandise to the shops is what has become known as REVERSE SHOPPING.
By the time people return goods to the shops, interest payments have already been collected on their credit cards. The credit companies make money and customers end up without goods and virtually ripped off.
In the USA the percentage of people living under the poverty line is in double digits and rising. The same financiers that created the crisis that publicly started in 2006 are still making money out of ordinary people's misery.
When you think about gifts bought during Christmas time, it feels a bit like the magician words 'now you see it, now you don't see it'. Customers paid got into additional debt and paid interest on debt to acquire goods that temporarily made them feel good about themselves. When celebrations are over, the gifts disappeared and their monies were taken away leaving them poorer and more frustrated.