The Continuing Saga of the Suits

In facing the “Buy one, get one free” suit deal, my quick-thinking wife said, “Let’s take the second suit anyway.” She called our older son on her cell phone from the store, as we knew he was shopping for a suit, and he said he was interested.

The store has a branch where he lives, so we are taking the suit to him this week when we visit. He will take it in and exchange it at no cost to himself for the suit he wants. While I would have derived perhaps $50 of consumer surplus from the “free” second suit, a suit’s value to him is at least $300; and with the pick of the store, he’ll buy a fancier suit.

Giving up a suit worth $50 to me, I confer at least six times the amount of surplus on him and derive even more pleasure than that myself, since I will enjoy seeing him wearing the best possible outfit. So I converted the nearly worthless (to me) second suit into something of value to me!

Couldn’t I have saved myself schlepping the suit on my plane trip and offered the deal to someone locally? Yes, but the pleasure from having that person have a new suit is less than that of seeing my son get one, and even less than the $50 of surplus that I would get from a second new suit.

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  1. Adam says:

    Here you’re falling into the trap of making an interpersonal comparison of utility. How do you know your consumer surplus and his consumer surplus are in any way comparable to each other?

    Then again, if you derive more utility from giving him the suit than from having it yourself, then the comparison can be made.

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  2. P says:

    The second suit was never “nearly worthless” to you. You always had the option to sell it, on eBay or a similar website. If it was a nice suit in a common size, you could have done quite well in the exchange.

    That’s what eBay is for, transferring things that have no value to you to those who do value it.

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  3. Robin Madeley says:

    forgetting, of course, that in order to return a BOGOF item, one usually needs to return BOTH items.

    An exchange may be another matter, but your son may still need to talk the store assistant in circles to pull it off…

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  4. Kieran says:

    I’d have picked up a second suit in black for funerals, but that works too.

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  5. jacob says:

    at this point you should get 2 free suits in exchange for the 2 blog posts…

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  6. csyd says:

    You do, of course, realize how incredibly cheap this series of articles makes you seem. What utility value do you derive from that?

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  7. Via Chicago says:

    Doesn’t this argument prove that BOGOF items are priced in a way that is economically inefficient?

    I wonder who the person was at Mens Warehouse who looked at all of the excess inventory and said “let’s have a BOGOF sale”. How did they determine that they’d unload more inventory that way than if they ran an “every suit 1/2 off!” sale. Although, the second sale wouldn’t have given Mr. Hamermesh the pleasure of giving his son a free suit.

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  8. John S. says:

    Most (but not all) stores actually take an equal percentage off each suit, so that you can return the second suit without being forced to return the first suit. For example, say you bought two suits, one for $300 and one for $200. Then according to the deal, you get $200 off, for a total of $300. However, that amounts to 40% off the retail price, so that the “return value” (i.e. the amount the store refunds you) of the first suit is $180, and the return value of the second suit is $120. You could have bought the two suits, then turned right around and returned the second suit for a net 40% off the first suit.

    Of course the best way to minimize the price you pay for one suit given such a policy is to find the suit you want, then find a second at the exact same price as the first. Return the second suit, and then your net percentage off the price of the first suit will be 50%. If you happen to want two suits of different value, you are better off to buy four suits, and then return two.

    If the store from which you bought your suit had this policy, then you could have saved yourself and your son some hassle. The end result would have been the same (unless your son wanted a suit of different value, in which case the return strategy I describe above is best), except for the transfer of wealth from you to your son, which you easily could take care of with a check.

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