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Shopping - Buying Habits

( Originally Published 1931 )

Next to knowing what you want is knowing how you want to get it. Once upon a time the housewife went shopping with a capacious market basket or mesh bag on her arm. There were few stores from which to choose; she made her purchases, paid for them, and carried them home. Since then retail selling has developed into a great and highly complicated system, and in the keen competition for business many stores seek to attract customers by offering all sorts of conveniences and even entertainment. Some of these will be described below, but the point to bear in mind is that they constitute a definite selling expense which is necessarily passed on to the customer through a higher mark-up; that is, through a wider margin between the cost of merchandise to the merchant and his price to the customer. Many of these conveniences are a legitimate part of our progress in the standards of living; but the customer should appraise them as such and realize that she is paying for them. Naturally, the cost to her varies with the efficiency of each store's management.

Merchandising units now range from the penny in the slot machine to mail order houses and great department stores handling hundreds of thousands of separate items. In one New York store the normal stock on hand covers 800,000 different articles.

Service given customers ranges from the self-service system of a certain chain of grocery shops to the suave ministrations of the heads of exclusive establishments on Fifth Avenue, Michigan Boulevard, or any other Main Street. The scope is as wide as that between the "Come and get it" of the Army cook and the flunkyism of a royal banquet.

Payment may be demanded at the time of purchase or expected at the end of the month or obligingly postponed into the dim future of the customer's pleasure. Of one New York store there is a cynical story alleging that a salesman went into hysterics when offered cash for a purchase.

It is conceivable that an invalid could remain in her room and, by telephone and mail order, keep her household furnished and provisioned indefinitely. On the other hand it is inconceivable that any able-bodied housewife could be kept out of the shops. She has her special group of pet stores which she has either inherited from the days of shopping with mother or developed through convenience and habit. To a very considerable degree her conception of economical shop-ping is based on her experience with those stores; the rest of the shopping world, like great expanses of the ancient maps, is given over to sea monsters, whirl-pools, and dragons. As a matter of record, let us examine briefly the various types of stores, the services they offer customers, the cost of rendering those services, and other strengths and weaknesses.

Mail-Order Houses : Here is a unique retailing development which is centered in Chicago. The mail-order houses distribute catalogues to their patrons twice a year, and on the basis of the descriptions and prices given, the customers order by mail, enclosing cash, postal money order, or check in payment. The goods are then sent to them by mail, parcel post, express, or even freight, according to the type and weight of the articles purchased. Mail-order houses sell everything from a paper of pins to portable houses and furnaces. Counting their customers by the hundred thousands, they can buy in great quantities at low prices. Aside from the expense of printing and distributing their catalogues, their selling costs are low; but the purchaser pays all postal or other transportation charges incurred in sending the goods. Thus the cost to the customer of a mail-order house is the catalogue price plus the delivery charge. From the shopper's point of view it is important to bear in mind that a mail-order house is inelastic so far as rapid changes in style and prices are concerned. It is also significant that the mail-order houses are now developing chains of retail stores to supplement their mail business.

Chain Stores : The country is becoming familiar with the chain-store development. A village must be modest in size these days to be without at least one of these shops with its distinctive store front. Some chains are devoted exclusively to the sale of groceries and other foodstuffs; other chains specialize in a wide variety of notions, hardware, and the cheaper dry goods and house furnishings with a top price of ten, twenty-five or fifty cents or one dollar for any one article; still others market cigars or candy, and yet other chains are operated as miniature department stores.

Their common policy is that of "cash and carry" ; as such, they are essentially neighborhood stores, drawing their clientele from a radius restricted by the willingness of customers to carry purchases home. Like the mail-order houses, the chain stores are in a position to buy in volume at low prices. They naturally require clerks to operate the stores, but they need no catalogues and restrict their advertising expenses largely to window posters. They are thus in a position to sell staple products at low prices, but their restricted clienteles limit their stocks pretty closely to those staples of the most popular grades.

Neighborhood Stores: The old-fashioned general store, corner grocery, butcher shop, and drug store are fast succumbing to the competition of the chain-store idea. Individually operated and necessarily buying in small quantities, these small-unit stores cannot meet the prices of the great organizations which can buy cheaply and which can afford to pay for the best management personnel. They may be a convenience where there are no more efficient stores in the neighborhood or where delivery is wanted, but they are an expensive one. The food stores in particular are kept in existence by the prevalent superstition that green groceries and fresh meats must be expensive to be good; that the so-called cut-rate chain stores handle an inferior quality of products. Naturally some chain organizations do specialize in the cheaper products; but all stores are operated to cater to the tastes of the territories which they serve and will stock the quality of goods demanded by their customers. Most neighbor-hood stores offer delivery service and monthly charge accounts. These conveniences increase operating costs, which must be covered by the stores in fixing prices, but many customers readily pay more to get these services.

Unit Stores: In the fields of house furnishings and of apparel there are many stores specializing in a single line of goods, as for instance shoes, millinery, custom or ready-to-wear garments, linens, furniture, or rugs. They vary in size and efficiency of operation, and this fact is, of course, reflected in the value which they can offer customers. As specialists in certain specific lines they are expected to have complete stocks of products in their respective fields. As a rule they offer delivery service and monthly charge accounts.

"Exclusive" Shops: These shops largely specialize in selling labels. In some few cases their "creations" in hats, dresses, perfume, or what not are really unique with them and cannot be matched elsewhere, but in many cases they are buying exactly the same things from exactly the same manufacturers as the department stores. In other cases where they actually have their own manufacturing plants they sell their surplus production to the more popular stores. Thus in either case the "exclusiveness" of the hat, suit, perfume, or what not is restricted to the label which is pasted into the finished product. The feature really exclusive with these shops is that they sell their goods "with the grand air," and it is by no means "free air" for the customer. These shops deliver purchases, of course; and they have tactful synonyms for the vulgar charge account. They frequently figure among the creditors of society women who go bankrupt.

Installment Houses : Quite at the other end of the social scale in shopping is the store which specializes in selling on the basis of a small cash deposit and monthly or weekly payments until the full purchase price has been met. However, the cost to the purchaser in relation to the intrinsic value of the article purchased approximates that in the exclusive shop. The fundamental consideration for the installment merchant is that the purchaser may never complete his payments. In such cases the merchant must arrange to collect the goods and resell them as second-hand stuff for whatever price he can get. This is a terribly expensive system on which to do a profitable business; as a result the installment purchaser generally pays an outrageous price for what he gets. The spread of the installment system is based on that kink in human nature which makes us clearly recognize that 25 plus 10 times 10 is 125 but which somehow lets us believe that an initial deposit of twenty-five dollars plus ten monthly payments of ten dollars each is considerably under one hundred and twenty-five dollars; especially if we are enthusiastic about that over-stuffed chair or that set of "World's Great Dramas of Love and Strife" which we can buy in this "painless" way. More will be said on this point when we later consider the whole question of cash and credit in buying for the home, but in the meantime let the shopper definitely understand that installment buying is the most expensive, and therefore the most unintelligent and undisciplined, method of shopping.

The writer remembers with mischievous, but perhaps pardonable, delight a certain dinner party attended by two book publishers and their wives. It was amiably serene until the conversation brought out the fact that each of the wives had succumbed to the supersalesmanship of a book agent and had agreed to purchase on the installment plan a certain set of volumes designed to inculcate in the children a love for reading and knowledge. "Thank God, at least," said one of the publishers as the tumult subsided, "that those books are not designed to inculcate thrift!"

Department Stores : These uniquely American institutions have been developed until certain of them now bring under a single roof everything from the pickled herring of the delicatessen shop to fine prints, water colors, and etchings. They are the great convenience stores for cities and their suburbs; as such the department store must have a central location which is seldom immediately convenient to any one residential district. In the smaller example this type of store is departmentalized only to the extent that various types of goods are segregated on special shelves and counters, all the stock being bought by the proprietor and possibly one or two assistants. In the larger institutions which have come to enjoy national and even inter-national fame, great buying organizations of specialists have been developed and a single department may carry the stock and do the business of a good-sized unit store.

The great strength of a well-run department store is in its very size. It can afford to command the highest type of administrative direction, which thus becomes available both for the more modest departments doing a few thousand dollars' worth of business and for the larger departments which figure their sales in millions of dollars annually. It can afford to maintain a great delivery system, for, the greater the volume from all departments, the less is the unit cost of delivering packages. It can make use of its capital resources in this, that, or the other department in accordance with seasonal variations in the demand for goods; similarly, it can divert trained sales personnel from one department to another. It can advertise specific things generously, knowing from experience that shoppers attracted to the store by this means will frequently make other purchases. It can command, through its heavy purchases of goods, not only low prices but also the eagerness of manufacturers to offer their latest and best products.

The department store has thus become the colossus of retail marketing, and as it reaches out into the fields of those finer things which once were handled only by the specialty stores and exclusive shops, it comes more and more to be accepted by the shopper as the logical place for satisfying her needs and her tastes most economically.

At the same time the shopper must always bear in mind one cardinal principle of shopping: So far as she is concerned, no store is better than its ability to deliver what she wants when she wants it and at the lowest price available to her. Blank & Co. may have by all odds the best store in her town; but if they do not carry the particular type of lemon-squeezer that she wants, and the despised Dash & Co. store does, then Dash's is in this particular respect the store for her.

Shopping is a composite of many individual purchases to satisfy specific needs. Each such purchase stands on its own feet as a thing apart, within the limits of common sense. Spending time and carfare in a trip across town to save ten cents on the purchase of a chopping bowl is neither economy nor common sense; on the other hand buying stockings without critical inspection at Blank's merely because the groceries are excellent there, is just as loose thinking.

A store becomes noted for the excellence of a certain department. That it can become so implies that it may sometime lose this prestige; yet many a shopper goes to Blank's for linens and to Dash's for silks because her mother used to take her to those places.

Every shopping trip is a brand-new adventure. If you are making the same round of stores every time, think it over. You may be right or you may be a victim of habit or of prejudice.


There is one element in modern shopping habits which deserves the serious attention of shoppers. It relates to the widespread abuse of a privilege which is inherently sound. The abuse causes unnecessary costs which the store passes back to the consumer through higher prices than would otherwise be necessary.

The reference is to the privilege of returning purchases for exchange or for refund of the purchase price. Many stores accord. this privilege in the case of all purchases except certain types of articles which are exempted for sanitary or other good reasons. In some few instances it prevents a real hardship. A shopper, for example, buys a rug in good faith and then discovers that it does not harmonize with the upholstery; or it may be a matter of stockings which are found not to match the dress with which they are intended to be worn. The right to return such purchases is a privilege which every shopper appreciates, yet many shoppers abuse this courtesy of the stores. The most general form of abuse is in the growing carelessness of shoppers in making selections in the stores; they know that they can return the goods if they finally decide otherwise or find something better elsewhere, and so they order the things sent home and postpone the decision. The simple desire to make an impression has more than once led a woman shopping with a friend to order some article, knowing full well that she does not want it or cannot afford to buy it. And, of course, there is always the deliberately dishonest shop-per who buys, let us say, a dress, wears it to some party, and then returns it to the store.

But the great volume of abuse arises from the mental laziness of shoppers rather than from conscious or even unconscious dishonesty. This is proved by the records of one New York store, which show that cash purchases produce an almost negligible proportion of "returns," purchases made against deposit account balances show a somewhat higher percentage of returns, and C.O.D. purchases show a still greater percentage of indecision. In other words, if a shopper is going to pay out cash then and there, she makes certain that her choice is right; if she is paying by means of a charge against her credit balance, she makes pretty sure that she will want to keep the purchase; but if she is buying either C.O.D. or on credit through a charge account and therefore has none of her money involved, she doesn't much care whether she is going to keep the article or not. In this last case all she has to do when the article is presented at her home for delivery is to tell the driver to take it back to the store as she has changed her mind.

The return privilege adds to the cost of doing business in several ways. It takes out of stock articles which might have been bought and kept by some other customer. It creates both an unprofitable delivery expense and also the cost of later calling for the goods and returning them to stock. Goods sent home, tried on, and repacked by an inexperienced packer frequently lose their freshness and may be definitely soiled or otherwise injured; in all these cases they must be reoffered at a reduced price. This means that the whole price range of the store must be higher to absorb these costs of doing business than they would otherwise be to assure a reasonable net profit on the year's operations. The extent of this mental laziness in shopping and of the consequent expense factor in retail merchandising is strikingly illustrated by the New York Evening World in a dispatch under the head, "Whims of Shoppers Prove Costly for Stores in Chicago" :

CHICAGO, Dec. 3. Women who lack self control in shopping cost department stores here from $9,000,000 to $12,-000,000 a year by returning goods, said D. F. Kelly, head of one of the largest stores, at the University of Chicago.

The speaker declared that returns in shoes were 10 to 15 per cent; women's coats, dresses and furs, 25 to 40 per cent; china, lamps and glassware, which require careful packing, 10 to 15 per cent; and pianos, radios and phonographs, on which cartage costs are high, 25 percent.


The American shopper is under a continuous bombardment from manufacturers and merchants. Billions of dollars are spent each year in persuading, enticing, and scaring the public into buying this, that, and the other thing. There is an insistent propaganda to stimulate new "needs." Supplementing this direct attack on our pocketbooks is the siren's song of credit.

Says the manufacturer: "You want my washing machine or my radio or my bedroom suite. Now don't shy at the expense. Any one of my dealers will be glad to accept a small deposit; you can get what you want and begin enjoying it right off, and you can pay the balance in weekly or monthly sums that you will never miss."

Says the merchant : "Buy at my store and pay me at the end of the month. You are above the common herd and it will be a privilege to extend you credit." Or his message is: "Buy at this special end-of-November sale and your purchases will not be billed to you until January."

The human race has an extraordinary capacity for getting along without things which it believes it needs; also this particular race has an equally extraordinary appetite for things where it is under no restraint. Cash at least the parting with cash or the lack of cash provides restraint. A man will order a more elaborate dinner at his club, where he can sign the check and not pay until the end of the month, than he will in a restaurant, where he must pay the waiter before he can get up from the table. The man may be just as certain to pay his club bill promptly as he is to pay the hotel waiter but somehow there is a difference. That is what artists call perspective.

The woman shopper is no less subject to this human trait, and she will find less wear and tear on her good intentions and her purse if she puts her shopping on a cash basis than if she tries to be economical in stores where she charges her purchases. The habit of paying cash is a silent partner who is a real factor in the success of many a home. Furthermore, in trading with cash stores there is a definite saving on prices. Stores which allow credit to any of their customers must fix their prices to cover the cost of extending credit; and as all reputable stores now adhere to the one-price policy, the cash customer must pay in these stores just as much as those who charge.

But quite aside from the dubious benefit of putting off till tomorrow what you should pay today, the charge account has certain real advantages for the shopper. It makes unnecessary the carrying of considerable sums of money, as well as any waiting for change. Of course, most stores will send purchases C.O.D., but this means that someone competent to pay the driver must be at home when the delivery is made. Further, the charge account identifies the shop-per as an established customer of the store; and it simplifies matters when purchases are being returned for exchange or refund.

To provide these distinct advantages of the charge account on a cash basis there has been developed what is called the deposit account. In this case the shopper deposits money with the store and draws against that deposit by purchasing goods. At the end of the month the shopper, instead of getting a bill which must be paid for articles already in use and perhaps consumed, receives a statement which tells her what her cash balance is and which credits her with the interest earned on her balance. Here, therefore, is a device which combines the essential advantages of both the store charge account and the savings-bank deposit. It might be subject to abuse if stores were allowed to use such advance deposits in the conduct of their business, but the banking laws of most states prohibit such use and specify how deposits of this nature are to be cared for. The greatest development of the deposit account idea has been achieved by a store in New York City which has some 48,000 active deposit accounts with an average balance of more than $5,000,000 to which interest at the rate of 4 per cent a year is credited quarterly. The administration of these funds is subject at any and all times to inspection by the state bank examiners. Other stores are beginning to adopt the idea, which is bound to spread as shoppers come to understand its benefits to them; but the shopper should bear in mind that the deposit account is completely efficient only when it is associated with the strictly cash store.

Installment buying has its distinguished advocates not only in the world of big business and finance but also in the realms of economic theory and university instruction. The basis for this support is that easy payments attract a wider buying public and thus permit volume production with consequent lowering of manufacturing costs per unit. The basis of the counter-arguments is that easy payments tempt many individuals to make purchases which their financial condition does not justify. The individual is perfectly free to stand with either group on a question of broad public policy; but where that individual is acting in the capacity of a shopper buying specific things to satisfy specific wants, he or she cannot dodge the issue that it is going to cost more to buy on the "easy payment" plan than it is to buy outright for cash. There is no product sold on the installment plan which can-not be bought at a lower price for cash.

The question of cash or credit is fundamental to efficient shopping. The following summary is believed to be a fair statement:

Putting your shopping on a cash basis exerts a healthy restraint against overbuying.

Shopping in cash stores gives you the full price benefit of selling for cash; whereas, paying cash in a cash and credit store permits no such saving.

Where the deposit account system is not available the charge account offers certain conveniences for which you may legitimately pay (if you can afford to) through the higher prices associated with the credit system.

Installment buying may be all right "for the other fellow" and in specific instances it may be a convenience to you; but it can never be the most efficient way for you to buy.

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