FREAK-Shot: Christmas Ornament Edition

Reader Tim Kelly sends in photo from a store in Lombard, Illinois:

As Tim writes:

I spotted an interesting sign while out Christmas shopping the other day.  The sign stated the company’s “breakage policy,” where any broken item must be bought, but that the store will only charge half price on the broken item.  The sign continued offered to repair the broken item, free of charge (I confirmed the free repairs from the shop owner, as it is not explicitly stated in the sign).

The sign was located on a mall kiosk selling Christmas ornaments.  I imagine breakage is a big issue for such a shop, as their product is relatively fragile and are highly enticing to bored kids stuck Christmas shopping with their parents.

My initial instinct upon seeing the sign was that this policy seemed to be inviting people to game the system.  A person could easily damage an ornament slightly in such a way that wouldn’t be highly visible on the tree, “apologize” emphatically to the shop owner, and walk away with a half priced item. This method is especially enticing given the free repairs offered.Ultimately, I imagine the good will garnered from the reasonable breakage policy leads to a lot less “break and run” situations where the store recovers nothing for the broken item, and the store ultimately is better off.  This would be especially true if the store still turns a profit on the half-priced items, which is likely.  I’m interested to hear what you and the Freakonomics community have to say on the topic.

What do you think, readers?

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  1. April says:

    Accidental breakage is a cost of doing business. Additionally, when you set up a kiosk in the walkway of the mall, there’s going to be accidental breakage if the business manager doesn’t arrange stock appropriately. Breakage policies aren’t worth the paper, ink, and laminate used to produce them.

    Businesses should deal with the people who purposefully break their products (or allow unsupervised children to break products), and plan for accidental breakage in their business model.

    With that said, if someone accidentally breaks something they should offer to pay for it.

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    • RGJ says:

      What the heck was so offensive about this that it was hidden?

      Legally, no court in the US would ever make you pay retail for accidental breakage of an item that isn’t safely inside a retail establishment, and instead set up in a high traffic area. If your shopping cart is jostled into a glass ornament perched precariously on a waist-high shelf, the burden of that “negligence” is the sellers, seems to me.

      The half price sign probably is a great deal for the seller, particularly when you factor in that many or most passersby aren’t just going to pony up full price anyway. Almost makes them seem customer friendly.

      Legal discussion on “you break it, you bought it” here :

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  2. Howard Tayler says:

    As Leavitt points out in the podcasts, people commit a lot less crime than you’d expect if opportunity and incentive were the only motivators. This policy assumes that most people are good, honest creatures. Besides, it’s quite difficult to break something “just a little bit.”

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  3. Bill Pitcher says:

    I suspect list price is twice what it would otherwise be….

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  4. Kazzy says:

    I would assume that the shopkeeper has final say on whether to enforce the breakage policy. If broken in such a way as to still make the item desirable, he might simply accept the apology and say, “We can probably repair that ourselves and still sell it at full price or at least at 75%.” My hunch would be that 50% would be the MINIMUM price charged; I doubt he is bound in any way by the presence of the sign.

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  5. cathy says:

    Seems like a very generous policy to me. I would expect a “you break it, you bought it” policy at a Christmas ornament place. I suspect that people are more likely to not report broken ornaments (even with the policy) than try to game the policy. At least with the only-pay-half policy, the owner might recoup some of the cost of the broken ornaments.

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  6. Bill O'Brien says:

    I think it’s very generous. Reminds me a bit of the rain check policy at a golf course or car wash. Inherit risk for the patron (playing loudy weather) but gratitude for chancing it on a day many others wouldn’t.

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  7. Irene says:

    Hidden due to low comment rating. Click here to see.

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    • RGJ says:

      It says “so” you are not liable. Poorly phrased, but the point being if they don’t touch something, they can’t break it.

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    • reuben says:

      It wasn’t “as you are not liable”, it was “so you aren’t liable” – I think it was telling the readers to make sure their children are careful because the store owner would attempt to get the reader to pay for damage that the children might cause.

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  8. Emily says:

    “You break it, you bought it” policies are actually unenforceable. The shop can only claim it’s actual loss – what it cost the shop, plus any expenses. This is quite a smart way of getting what it is entitled to while seeming to be generous.

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