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Why prices are so high – 8 ways retail pricing algorithms gouge consumers

<a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> The just-released report of the inquiry into <a href="https://pricegouginginquiry.actu.org.au/">price gouging and unfair pricing</a> conducted by Allan Fels for the Australian Council of Trades Unions does more than identify the likely offenders. It finds the biggest are supermarkets, banks, airlines and electricity companies. It’s not enough to know their tricks. Fels wants to give the Australian Competition and Consumer Commission more power to investigate and more power to prohibit mergers. But it helps to know how they try to trick us, and how technology has enabled them to get better at it. After reading the report, I’ve identified eight key maneuvers. <h2>1. Asymmetric price movements</h2> Otherwise known as <a href="https://www.jstor.org/stable/25593733">Rocket and Feather</a>, this is where businesses push up prices quickly when costs rise, but cut them slowly or late after costs fall. It seems to happen for <a href="https://www.sciencedirect.com/science/article/abs/pii/S0140988323002074">petrol</a> and <a href="https://www.sciencedirect.com/science/article/abs/pii/S105905601730240X">mortgage rates</a>, and the Fels inquiry was presented with evidence suggesting it happens in supermarkets. Brendan O’Keeffe from NSW Farmers told the inquiry wholesale lamb prices had been falling for six months before six Woolworths announced a cut in the prices of lamb it was selling as a “<a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Christmas gift</a>”. <h2>2. Punishment for loyal customers</h2> A <a href="https://theconversation.com/simple-fixes-could-help-save-australian-consumers-from-up-to-3-6-billion-in-loyalty-taxes-119978">loyalty tax</a> is what happens when a business imposes higher charges on customers who have been with it for a long time, on the assumption that they won’t move. The Australian Securities and Investments Commission has alleged a big <a href="https://theconversation.com/how-qantas-might-have-done-all-australians-a-favour-by-making-refunds-so-hard-to-get-213346">insurer</a> does it, setting premiums not only on the basis of risk, but also on the basis of what a computer model tells them about the likelihood of each customer tolerating a price hike. The insurer disputes the claim. It’s often done by offering discounts or new products to new customers and leaving existing customers on old or discontinued products. It happens a lot in the <a href="https://www.finder.com.au/utilities-loyalty-costing-australians-billions-2024">electricity industry</a>. The plans look good at first, and then less good as providers bank on customers not making the effort to shop around. Loyalty taxes appear to be less common among mobile phone providers. Australian laws make it easy to switch <a href="https://www.reviews.org/au/mobile/how-to-switch-mobile-carriers-and-keep-your-number/">and keep your number</a>. <h2>3. Loyalty schemes that provide little value</h2> Fels says loyalty schemes can be a “low-cost means of retaining and exploiting consumers by providing them with low-value rewards of dubious benefit”. Their purpose is to lock in (or at least bias) customers to choices already made. Examples include airline frequent flyer points, cafe cards that give you your tenth coffee free, and supermarket points programs. The purpose is to lock in (or at least bias) consumers to products already chosen. The <a href="https://www.accc.gov.au/consumers/advertising-and-promotions/customer-loyalty-schemes">Australian Competition and Consumer Commission</a> has found many require users to spend a lot of money or time to earn enough points for a reward. Others allow points to expire or rules to change without notice or offer rewards that are not worth the effort to redeem. They also enable businesses to collect data on spending habits, preferences, locations, and personal information that can be used to construct customer profiles that allow them to target advertising and offers and high prices to some customers and not others. <h2>4. Drip pricing that hides true costs</h2> The Competition and Consumer Commission describes <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">drip pricing</a> as “when a price is advertised at the beginning of an online purchase, but then extra fees and charges (such as booking and service fees) are gradually added during the purchase process”. The extras can add up quickly and make final bills much higher than expected. Airlines are among the best-known users of the strategy. They often offer initially attractive base fares, but then add charges for baggage, seat selection, in-flight meals and other extras. <h2>5. Confusion pricing</h2> Related to drip pricing is <a href="https://www.x-mol.net/paper/article/1402386414932836352">confusion pricing</a> where a provider offers a range of plans, discounts and fees so complex they are overwhelming. Financial products like insurance have convoluted fee structures, as do electricity providers. Supermarkets do it by bombarding shoppers with “specials” and “sales”. When prices change frequently and without notice, it adds to the confusion. <h2>6. Algorithmic pricing</h2> <a href="https://pricegouginginquiry.actu.org.au/wp-content/uploads/2024/02/InquiryIntoPriceGouging_Report_web.pdf">Algorithmic pricing</a> is the practice of using algorithms to set prices automatically taking into account competitor responses, which is something akin to computers talking to each other. When computers get together in this way they can <a href="https://www.x-mol.net/paper/article/1402386414932836352">act as it they are colluding</a> even if the humans involved in running the businesses never talk to each other. It can act even more this way when multiple competitors use the same third-party pricing algorithm, effectively allowing a single company to influence prices. <h2>7. Price discrimination</h2> Price discrimination involves charging different customers different prices for the same product, setting each price in accordance with how much each customer is prepared to pay. Banks do it when they offer better rates to customers likely to leave them, electricity companies do it when they offer better prices for business customers than households, and medical specialists do it when they offer vastly different prices for the same service to consumers with different incomes. It is made easier by digital technology and data collection. While it can make prices lower for some customers, it can make prices much more expensive to customers in a hurry or in urgent need of something. <h2>8. Excuse-flation</h2> <a href="https://www.bloomberg.com/news/articles/2023-03-09/how-excuseflation-is-keeping-prices-and-corporate-profits-high">Excuse-flation</a> is where general inflation provides “cover” for businesses to raise prices without justification, blaming nothing other than general inflation. It means that in times of general high inflation businesses can increase their prices even if their costs haven’t increased by as much. On Thursday Reserve Bank Governor <a href="https://www.afr.com/policy/economy/inflation-is-cover-for-pricing-gouging-rba-boss-says-20240215-p5f58d">Michele Bullock</a> seemed to confirm that she though some firms were doing this saying that when inflation had been brought back to the Bank’s target, it would be "much more difficult, I think, for firms to use high inflation as cover for this sort of putting up their prices." <h2>A political solution is needed</h2> Ultimately, our own vigilance won’t be enough. We will need political help. The government’s recently announced <a href="https://treasury.gov.au/review/competition-review-2023">competition review</a> might be a step in this direction. The legislative changes should police business practices and prioritise fairness. Only then can we create a marketplace where ethics and competition align, ensuring both business prosperity and consumer wellbeing. This isn’t just about economics, it’s about building a fairer, more sustainable Australia.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/223310/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/david-tuffley-13731">David Tuffley</a>, Senior Lecturer in Applied Ethics & CyberSecurity, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-prices-are-so-high-8-ways-retail-pricing-algorithms-gouge-consumers-223310">original article</a>.

Money & Banking

Retailer pulls "creepy" and "disturbing" ad for school uniforms

H&M has removed a school uniform ad in Australia after social media users slammed the retailer for sexualising children. The ad, which a few social media users have screenshot before it was removed, features two young girls in school uniform looking back at the camera with the caption: "Make those heads turn in H&M's Back to School fashion." Users on X, formerly known as Twitter, slammed the ad calling it it "creepy" and "disturbing", and sharing their own stories about "being ogled" at school. "What is your intention with this sponsored Facebook ad?" Australian writer Melinda Tankard Reist, whose work addresses sexualization and the harms of pornography, shared on X. "Little schoolgirls generally don't want to 'turn heads.' The large numbers I engage with in schools want to be left alone to learn and have fun and not draw unwanted attention to their appearance." "The little girls parents generally prefer heads don't 'turn' when others see their daughters walking to school, on a bus or in class," she continued. "Why would you want to fuel the idea that little girls should draw attention to their looks, bodies and 'style'?" <blockquote class="twitter-tweet"> <a href="https://twitter.com/hm?ref_src=twsrc%5Etfw">@hm</a> <a href="https://twitter.com/hmaustralia?ref_src=twsrc%5Etfw">@hmaustralia</a> what is your intention with this sponsored Facebook ad? Little schoolgirls generally don’t want to “turn heads”. The large numbers I engage with in schools want to be left alone to learn and have fun and not draw unwanted attention to their appearance 1/ <a href="https://t.co/DDwv42GeNz">pic.twitter.com/DDwv42GeNz</a> — Melinda TankardReist (@MelTankardReist) <a href="https://twitter.com/MelTankardReist/status/1747866459836158415?ref_src=twsrc%5Etfw">January 18, 2024</a></blockquote> Another user wrote: "This is really disturbing. "I remember being cat called whilst waiting for the bus in my school uniform. It made me feel unsafe." "Girls go to school to get an education, not to be jeered at by onlookers," they concluded. The Swedish fashion giant has since removed the ad and apologised for the campaign. "We have removed this ad," they told CNN. "We are deeply sorry for the offence this has caused and we are looking into how we present campaigns going forward." Images: Getty

Legal

Senior wins $38,000 a year for life because of retailer's mistake

A man in the US is set for life after a retailer's blunder led him to win the lotto. Michael Sopejstal, 60, who lives in Illinois, won the Lucky for Life lotto after a retailer at a GoLo gas station accidentally printed a ticket with 10 lines for a single draw. Buying the Lucky for Life ticket has been part of Sopejstal's routine, as he travels from Illinois to Michigan every few weeks to eat at his favourite restaurant, and this time he got lucky. “I checked my ticket one morning and saw that I had won $US25,000 ($A38,000) a year for life,” he told Michigan Lottery officials. “I immediately started thinking about all the things I could do with the money and whether I wanted to take the lump sum or annuity option. “It was an amazing feeling!” Sopejstal chances of winning were one in more than 1.8 million. According to the lottery, Sopejstal recently visited their headquarters to claim his prize. They said he opted for a lump sum payment of $US390,000 ($A590,000) instead of the annual payment. Sopejstal also told them that he plans to use his prize money to travel and save whatever is left. Images: Getty

Money & Banking

Schumacher’s family suing German magazine over fake interview

Michael Schumacher’s family is preparing to take legal action against German tabloid magazine Die Aktuelle, for publishing an AI-generated “interview” with the star. The publication has been slammed for using Michael’s face on their April 15 front cover, promoting the piece as “the first interview” since the star’s skiing accident in December 2013. “No meagre, nebulous half-sentences from friends. But answers from him! By Michael Schumacher, 54!” read the text in the magazine. “It sounded deceptively real,” they added in the strapline, which was the only indicator that the piece was fake. The “interview” included quotes that insensitively described Schumacher’s recovery, following the accident where he suffered a serious brain injury. “I was so badly injured that I lay for months in a kind of artificial coma, because otherwise my body couldn’t have dealt with it all,” the quote read. “I’ve had a tough time but the hospital team has managed to bring me back to my family,” they added. It was only at the end of the article that the publication revealed that they used Character.ai, an AI chatbot, to create the interview. A spokesperson for Schumachers confirmed their intention to take legal action against Die Aktuelle to Reuters and ESPN. This isn’t the first time Schumacher’s family have taken action against Die Aktuelle. In 2015, Michael’s wife, Corinna Schumacher filed a lawsuit against the magazine after they used Corinna’s picture with the headline: “Corinna Schumacher – a new love makes her happy.” The story was actually about their daughter, Gina, but the lawsuit was dismissed. Image: Getty Images

Legal

Obese yet malnourished toddler mummy sheds light on life in 17th century aristocratic Austria

In a creepy discovery published, a collaboration of German scientists have performed a ‘virtual autopsy’ on a mummified toddler’s body, found in a 17th century Austrian crypt. Buried in a wooden coffin that was slightly too small and deformed the skull, the young child’s body appeared to be both obese and malnourished. Researchers say the findings might provide a rare insight into historical Austrian aristocratic society. By using CT scanning, scientists were able to perform a ‘virtual autopsy’ on the mummy which was naturally mummified in the conditions of the crypt. Well-preserved soft tissue showed the child was a boy, overweight for his age, and radiocarbon dating suggests a date of death between 1550 and 1635 CE. By examining the formation and length of the body’s bones, plus evidence of tooth eruption, the researchers were able to estimate that the child was about one year old when he died. The bones also showed that despite being well-fed, the boy was malnourished, with his malformed ribs displaying signs of rachitic rosary. This condition presents in a pattern of prominent bony knobs at points where the rib joins cartilage and results from diseases associated with specific vitamin deficiencies such as rickets (vitamin D) and scurvy (vitamin C). Vitamin D is found in foods like salmon, tuna, mackerel and beef liver and egg yolks, but we typically only get around 10% of our required Vitamin D from our diets – the rest is made by our bodies when exposed to ultraviolet B (UVB) from the sun. “The combination of obesity along with a severe vitamin-deficiency can only be explained by a generally ‘good’ nutritional status along with an almost complete lack of sunlight exposure,” said Dr Andreas Nerlich of the Academic Clinic Munich-Bogenhausen and lead researcher. The child appears to have died from pneumonia, judging by the evidence of inflammation in the lungs. Rickets is known to make children more vulnerable to pneumonia, suggesting that, sadly, not only was the child malnourished, but that this condition may have also led to his untimely demise. “We have to reconsider the living conditions of high aristocratic infants of previous populations,” said Nerlich. Relatively little is known about aristocratic childhood in the late Renaissance period, so these mummified remains give key insights into life in Europe of a period generally known for its fervent creativity and intellectual development. “This is only one case,” said Nerlich, “but as we know that the early infant death rates generally were very high at that time, our observations may have considerable impact in the over-all life reconstruction of infants even in higher social classes.” To understand more about this period, researchers scoured historical records of the crypt and the family to whom the crypt belonged. Curiously, the child was buried in a simple, unmarked, wooden coffin, although he was dressed in an expensive silk hooded coat. The unmarked coffin appeared to have been slightly too small for the body such that the skull became deformed and was the only infant buried amongst the identifiable adult metal coffins in the crypt. Historical records of renovations on the crypt confirmed the radiocarbon dating, indicating the child was likely buried sometime after 1600 CE. The crypt belonged to the Counts of Starhemberg and traditionally was kept exclusively for the burial of heirs to their titles, and their wives, making the body likely to be that of the first-born (and only) son, Reichard Wilhelm, of Count Starhemberg. “We have no data on the fate of other infants of the family,” Nerlich said, regarding the unique burial. “According to our data, the infant was most probably [the count’s] first-born son after erection of the family crypt, so special care may have been applied.” This article originally appeared on <a href="https://cosmosmagazine.com/history/toddler-mummy-17thcentury-austria/" target="_blank" rel="noopener">cosmosmagazine.com</a> and was written by Clare Kenyon. Image: Andreas et al. (2022)

Travel Trouble

State-run German museums disclose works acquired during Nazi era

A Munich-based foundation that oversees the art collections of museums located throughout the titular German state is set to publicly disclose the origins of over 1,000 works acquired during the Nazi rule. The Bavarian State Painting Collections is launching an extensive database that includes information regarding over 1,200 paintings that researchers have found were acquired during the National Socialist period, or had ownership links to Nazi officials. There are a series of artworks that were given to museums and galleries during this time that are often subject to legal claims from descendants of persecuted Jewish families. Operating since 1999, a specialised unit dedicated to origin research has been reviewing all the ownership records of each and every artwork in the Bavarian State Paintings Collections that were created before 1945, and have been acquired since 1933. Throughout the database notes, a statement will accompany each artwork to alert people of its proper origins. This protocol is in keeping with the 1998 Washington Principles and the 1999 Joint Declaration of the Federal Government, both of which mounted calls for greater transparency surrounding the provenances of artworks believed to be subject to restitution claims. Other initiatives have been put into practice around the world, with <a href="https://oversixty.com.au/entertainment/art/new-york-museums-now-required-to-acknowledge-art-stolen-under-nazi-rule">museums and galleries in New York</a> now now legally required to acknowledge art stolen under the Nazi regime. The new state law requires New York museums to display signage alongside works of art from before 1945 that are known to have been stolen or forcibly sold during the Nazi rule. According to legislation and expert testimony, the Germans looted 600,000 works of art during World War II. Image credits: Getty Images

Art

Electricity retailer tells customers to leave

A small electricity retailer has told its customers to leave and find another company as they expect their prices to soar. Victorian energy supplier Electricityinabox expects its prices to increase by a whopping 95 per cent on July 1. CEO Morgan Duncan sent out a letter to all customers telling them that "only the lazy or crazy would stay" with the company. The letter begins with a straightforward statement telling customers “you need to find a new electricity provider today". "You need to be aware that smaller low price high value retailers are exiting this market. Four have already exited, some of them closed their doors," it continues. The company will continue to provide certain services but is expected to leave the electricity sector due to the increasing demand making it expensive. Energy companies ReAmped, LPE, Discover, Elysian and Future X have told customers to look elsewhere, while Momentum, Simply, Mojo, CovAU and Nectr have stopped accepting new customers. The news comes just a week after Australian Energy Market Operator (AEMO) called on Aussies to reduce their electricity consumption. Australian Energy Regulator (AER) and Australian Competition and Consumer Commission (ACCC) have warned retailers not to take advantage of the situation. Image: Shutterstock

Money & Banking

ALDI announces new change to all stores

ALDI supermarket has announced an exciting new change coming to all stores across Australia. The German retailer provides large 212-litre carts - which are 1.1m high - for shoppers to use, which have since gained a lot of criticism from elderly, pregnant and short people. Now ALDI has announced it will soon be rolling out half trolleys for customers to do smaller grocery shops. “We recognise that customers are looking for greater convenience when they visit our stores, as it’s almost impossible not to pick up the excellent value products on offer,” the retailer said. “That’s why we’re introducing smaller trolleys across all our locations, so our customers can more efficiently pick up products while doing smaller grocery shops.” Shoppers celebrated the news with many welcoming the change which will see their shopping habits change. “Finally! I almost fall into the big ones to reach the bottom,” one person wrote. “Great news for people who have had hip and shoulder replacement surgery,” another commented. “This is great, I also love the big trolleys at Aldi. They are always in good condition and the height is more comfortable,” someone else welcomed. The exciting news comes just months after ALDI introduced shopping baskets in their stores. Image: Shutterstock

Food & Wine

ALDI looking for fresh meat (graduates)

ALDI Australia is looking to hire a fresh batch of graduates for their insanely popular program. The German retailer’s graduate program is inundated with applications each year thanks to the attractive $92,000 starting salary, a company car and iPhone, as well as five weeks annual leave. Successful applicants will undertake a comprehensive program over a two-year period while rotating through the exciting challenge of the business. “Our graduate jobs aren’t easy but the greater the challenge, the greater the reward,” their <a href="https://www.aldicareers.com.au/Graduate-Program-Application-Process" target="_blank" rel="noopener">website</a> reads. “You’ll have exposure to serving customers on registers, managing sections in our distribution centre, undertaking site meetings with our property team, and developing your skills as a leader - a career achievement you can be proud of.” Applicants who succeed in their training will take on the role of an Executive Manager, giving them the opportunity to run up three-to-five stores. Peter Slaven recently completed the program and is now an Executive Manager of Store Operation in NSW. “I was prepared for a lot of observation and structured training, however I was pleasantly surprised with how hands-on ALDI’s graduate program is,” he told <a href="https://www.news.com.au/finance/work/careers/aldis-insane-92000-job-for-uni-graduates/news-story/fbba33620c65bfad5a5f80df3e730155?utm_campaign=EditorialSB&utm_source=news.com.au&utm_medium=Facebook&utm_content=SocialBakers" target="_blank" rel="noopener">news.com.au</a>. “During the program I worked in three cities and over 30 stores, building relationships with close to 500 people. No two days are the same and I learnt to adapt quickly to constant change and I am still learning new things every day.” ALDI group director of human resources and projects Hayden Rydberg said the program attracted people from all walks of life. “It’s an opportunity for ambitious future leaders to hit the ground running in a supportive environment where you will learn directly from industry leaders, all while accelerating your career with a rewarding and dynamic retail business,” he said. Applicants must be in their final year of study or recently completed a master’s degree in any subject. Applications for ALDI's 2023 graduate program close on Monday March 28, 2022. Image: Shutterstock

Money & Banking

Retailers criticised for ‘outrageous’ markups on rapid COVID tests amidst shortage

Retailers across Australia have been criticised by consumers for marking up the prices of rapid antigen tests for COVID-19, amidst increasing case numbers and a national shortage of tests. Many people around the country are struggling to find any tests at all, which is where services like <a rel="noopener" href="https://findarat.com.au/" target="_blank">Find A RAT</a> come in, helping people share information about stores that have stock, although there are only 149 listings of stores with RATs in stock, compared to 2271 listings of stores that are sold out. Of those stores that do have RATs in stock, many are charging desperate consumers an exorbitant amount for the necessary at-home testing kits. Australians have taken to social media to name and shame retailers that are charging sky-high prices for the tests, including Channel 9 reporter Airlie Walsh, who said that a BP service station in Edgecliff, in Sydney’s eastern suburbs, was selling individual tests for $30 each. She added, “They’re as little as $1 – $2 in Europe, but for a family of four in Oz, you’ll pay $120.” Journalist Eliza Barr was finally able to acquire some tests for $19.99 each, marked up from $12.25 to $13.75 and typically sold as a pack of 20. <blockquote class="twitter-tweet"> The most cursory Google reveals these Innoscreen tests are meant to come in a box of 20 and can cost as little as between $12.25 and $13.75 per test in Australia. This is absolutely unforgivable. <a href="https://t.co/72eih9FOOZ">pic.twitter.com/72eih9FOOZ</a> — Eliza Barr (@ElizaJBarr) <a href="https://twitter.com/ElizaJBarr/status/1478198750401073153?ref_src=twsrc%5Etfw">January 4, 2022</a></blockquote> While online retailer Kogan is now out of stock, as are Chemist Warehouse, Amazon and Harvey Norman, screenshots show that at one point, it was selling individual tests for $44 each. Beauty and health journalist Eleanor Pendleton took to Instagram to criticise the markups, explaining that in November, she purchased over 100 RATs for a production shoot, costing $1200. She wrote, “What cost me $1200 two months ago would today cost $4000! “With PCR tests only available to those with symptoms, the price gouging on RATs is disgusting.” The markups come as Prime Minister Scott Morrison held firm to his government’s decision not to make RATs free, despite individual state governments such as Queensland and Victoria purchasing supplies themselves in order to provide them for free to residents. The price gouging also comes as the need for RATs increases, as governments urge citizens not to line up for PCRs unless they are symptomatic. On Tuesday afternoon, the Australian Competition and Consumer Commission announced that it was on the case. Rod Sims, chairman of the ACCC, said it was monitoring the situation “very closely”, explaining, “If we get a number of reports about excessive pricing from particular outlets, that’s when we can get involved and take whatever we judge to be the appropriate action. We’re gathering information as fast as we can.” Image: Massimiliano Finzi

News

I chose the electricity retailer offering the best deal for my home. That’s not what I got

Households in most of Australia have been able to choose between electricity retailers for more than a decade. The main reason is to <a rel="noopener" href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage" target="_blank">reduce their bills</a>. But past research by the <a rel="noopener" href="https://www.vepc.org.au/" target="_blank">Victoria Energy Policy Centre</a> (at Victoria University) has found only marginal benefits in switching retailers. Our study of more than 48,000 bills from Victorian households in 2018, for example, found households typically saved <a rel="noopener" href="https://theconversation.com/victorians-who-switched-energy-retailers-only-save-45-a-year-leaving-hundreds-on-the-table-122786" target="_blank">less than A$50 a year</a> by switching energy providers. Has anything improved since then? A few weeks ago I decided to test the market for my own household supply. To guide my choice, I evaluated 357 competing offers from 30 retailers using my half-hourly consumption and solar export data for the last year. The 357 offers came from the Victorian government’s price comparison <a rel="noopener" href="https://compare.energy.vic.gov.au/" target="_blank">website</a>, the only comprehensive source of all commonly available offers. After having found the deal I wanted, it was a painless and quick online process to switch to the new retailer. Two weeks later I checked what had actually happened. I discovered my new retailer had not switched me to its cheapest offer, but to one of its most expensive. I estimate I’ll still save about $143 for the year. But I would have saved about $100 more if the company had put me on its cheapest advertised offer (which, after all, was the reason I chose this retailer). These numbers might not be large, but I have a small bill because I have solar panels and consume much less electricity than typical customers. For the typical customer, the differences would be bigger. I have asked my new retailer to explain, but am yet to receive a reply. How I worked out my (lack of) savings My electricity bill has several elements: a daily charge, two consumption rates and a solar feed-in rate. You might note such elements in the offer you choose and then compare them to the offer the retailer actually puts you on. But you’d need to be highly motivated with time on your hands to do so. To do my sums I used special software to scrape and price all competing offers. This software, developed over several years and used in our previous research, is not publicly available. The outcome of my test is broadly consistent with the findings of our previously mentioned research. That analysis – <a rel="noopener" href="https://link.springer.com/article/10.1007%2Fs11149-020-09418-9" target="_blank">using more than 48,000 bills</a> voluntarily uploaded to the Victorian government’s price comparison website in 2018 – found typical households could theoretically save A$281 a year, or about 20% of their bill, by switching to the best possible advertised deal. In reality, however, customers who switched retailers saved only A$45 a year – or about 3% of their annual bill. <img src="https://images.theconversation.com/files/431880/original/file-20211115-13-1wdrcv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="Child using light switch" /> In theory customers who switch electricity retailers should be able cut their annual bill by 20%. In reality it turns out to be about 3%. Image: Shutterstock I cannot be sure my recent experience is typical. But I think it likely other switchers will have had a similar experience. My study of the 357 competing offers available to me suggests many retailers seem to use “bait and switch” – or “tease and squeeze” – marketing strategies to attract new customers. What should be made of this? Choice can be valuable. Competition can lead to innovations – such as solar and battery packages with zero upfront payment that are now appearing in the the market. But the benefit of reforms making it easier to choose and switch between electricity retailers are not being fully realised. The more complex the market becomes as electricity generation is progressively decentralised and electricity buyers also become sellers, the harder it becomes to assess the merits of the complicated offers from energy retailers. Or even to know if what you signed up for is what you are actually getting. Had I known my new retailer would not switch me to its best offer (the one that attracted me in the first place), I wouldn’t have switched. This underlines the need for governments and regulators to look at how the market is working in practice, not just in theory. Examples of this approach are the 2017 independent review of Victoria’s electricity and gas retail markets <a rel="noopener" href="https://www.energy.vic.gov.au/about-energy/policy-and-strategy" target="_blank">chaired by former deputy premier John Thwaites</a> and the Australian Competition and Consumer Commission’s <a rel="noopener" href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage" target="_blank">2018 inquiry into electricity affordability</a>. But these are exceptions. The devil lies in the detail of how customers search for better offers and then switch to retailers in pursuit of those better offers. Regulations to clean up possibly misleading advertising and “sharp” business practices should flow from that.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/171676/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a rel="noopener" href="https://theconversation.com/profiles/bruce-mountain-141253" target="_blank">Bruce Mountain</a>, Director, Victoria Energy Policy Centre, <a rel="noopener" href="https://theconversation.com/institutions/victoria-university-1175" target="_blank">Victoria University</a> This article is republished from <a rel="noopener" href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a rel="noopener" href="https://theconversation.com/i-chose-the-electricity-retailer-offering-the-best-deal-for-my-home-thats-not-what-i-got-171676" target="_blank">original article</a>. Image: Getty Images

Money & Banking

I chose the electricity retailer offering the best deal for my home. That’s not what I got

Households in most of Australia have been able to choose between electricity retailers for more than a decade. The main reason is to <a href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage">reduce their bills</a>. But past research by the <a href="https://www.vepc.org.au/">Victoria Energy Policy Centre</a> (at Victoria University) has found only marginal benefits in switching retailers. Our study of more than 48,000 bills from Victorian households in 2018, for example, found households typically saved <a href="https://theconversation.com/victorians-who-switched-energy-retailers-only-save-45-a-year-leaving-hundreds-on-the-table-122786">less than A$50 a year</a> by switching energy providers. Has anything improved since then? A few weeks ago I decided to test the market for my own household supply. To guide my choice, I evaluated 357 competing offers from 30 retailers using my half-hourly consumption and solar export data for the last year. The 357 offers came from the Victorian government’s price comparison <a href="https://compare.energy.vic.gov.au/">website</a>, the only comprehensive source of all commonly available offers. After having found the deal I wanted, it was a painless and quick online process to switch to the new retailer. Two weeks later I checked what had actually happened. I discovered my new retailer had not switched me to its cheapest offer, but to one of its most expensive. I estimate I’ll still save about $143 for the year. But I would have saved about $100 more if the company had put me on its cheapest advertised offer (which, after all, was the reason I chose this retailer). These numbers might not be large, but I have a small bill because I have solar panels and consume much less electricity than typical customers. For the typical customer, the differences would be bigger. I have asked my new retailer to explain, but am yet to receive a reply. <h2>How I worked out my (lack of) savings</h2> My electricity bill has several elements: a daily charge, two consumption rates and a solar feed-in rate. You might note such elements in the offer you choose and then compare them to the offer the retailer actually puts you on. But you’d need to be highly motivated with time on your hands to do so. To do my sums I used special software to scrape and price all competing offers. This software, developed over several years and used in our previous research, is not publicly available. The outcome of my test is broadly consistent with the findings of our previously mentioned research. That analysis – <a href="https://link.springer.com/article/10.1007%2Fs11149-020-09418-9">using more than 48,000 bills</a> voluntarily uploaded to the Victorian government’s price comparison website in 2018 – found typical households could theoretically save A$281 a year, or about 20% of their bill, by switching to the best possible advertised deal. In reality, however, customers who switched retailers saved only A$45 a year – or about 3% of their annual bill. <img src="https://images.theconversation.com/files/431880/original/file-20211115-13-1wdrcv4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="Child using light switch" /> In theory customers who switch electricity retailers should be able cut their annual bill by 20%. In reality it turns out to be about 3%. Shutterstock I cannot be sure my recent experience is typical. But I think it likely other switchers will have had a similar experience. My study of the 357 competing offers available to me suggests many retailers seem to use “bait and switch” – or “tease and squeeze” – marketing strategies to attract new customers. <h2>What should be made of this?</h2> Choice can be valuable. Competition can lead to innovations – such as solar and battery packages with zero upfront payment that are now appearing in the the market. But the benefit of reforms making it easier to choose and switch between electricity retailers are not being fully realised. The more complex the market becomes as electricity generation is progressively decentralised and electricity buyers also become sellers, the harder it becomes to assess the merits of the complicated offers from energy retailers. Or even to know if what you signed up for is what you are actually getting. Had I known my new retailer would not switch me to its best offer (the one that attracted me in the first place), I wouldn’t have switched. This underlines the need for governments and regulators to look at how the market is working in practice, not just in theory. Examples of this approach are the 2017 independent review of Victoria’s electricity and gas retail markets <a href="https://www.energy.vic.gov.au/about-energy/policy-and-strategy">chaired by former deputy premier John Thwaites</a> and the Australian Competition and Consumer Commission’s <a href="https://www.accc.gov.au/publications/restoring-electricity-affordability-australias-competitive-advantage">2018 inquiry into electricity affordability</a>. But these are exceptions. The devil lies in the detail of how customers search for better offers and then switch to retailers in pursuit of those better offers. Regulations to clean up possibly misleading advertising and “sharp” business practices should flow from that.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/171676/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/bruce-mountain-141253">Bruce Mountain</a>, Director, Victoria Energy Policy Centre, <a href="https://theconversation.com/institutions/victoria-university-1175">Victoria University</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/i-chose-the-electricity-retailer-offering-the-best-deal-for-my-home-thats-not-what-i-got-171676">original article</a>. Image: Shutterstock

Retirement Income

Paws up! Six puppies join the NSW Police Dog Unit

Six German Shepherd puppies have joined the elite, and adorable, NSW Police Dog Force Unit to report for duty. Four furry females and two males were born in May to mum Bonnie and dad Vegas, and have each been named by the patients at Sydney Children's Hospital in Randwick. The female pups are Carrie, Cali, Carol and Cody, and their brothers are Coops and Charger. Superintendent Michael Rochester, Dog and Mounted Commander, said the kids of Sydney Children's Hospital left an important legacy on the Dog Unit by naming their newest recruits. "Unfortunately, this year the kids weren't able to meet the pups in person because of the pandemic, but we were very glad we could get them involved virtually," Supt Rochester said in a statement. "If these pups are successful through their training, they'll go on to help the community in many ways." "Our dogs are used to find missing people, assist in pursuits, detect drugs, explosives and other paraphernalia, and have a variety of other specialist functions which make them an invaluable law enforcement capability." The adorable puppies have begun their foundational training, as they are being exposed to new a range of new experiences and environments. The NSW Police force shared the news of the puppies on their Twitter account, along with the backstory to each dog's name. <blockquote class="twitter-tweet"> The NSW Police Force's newest police pups have been named by patients from Sydney Children's Hospital. “I wanted to name the puppy Cody because my best friend’s name is Cody, and dogs are her favourite animal,” said eight-year-old Alice.<a href="https://t.co/9skvOMkOOj">https://t.co/9skvOMkOOj</a> <a href="https://t.co/n7SdeQRTsn">pic.twitter.com/n7SdeQRTsn</a> — NSW Police Force (@nswpolice) <a href="https://twitter.com/nswpolice/status/1442652246060060676?ref_src=twsrc%5Etfw">September 28, 2021</a></blockquote> They said on <a rel="noopener" href="https://www.police.nsw.gov.au/news/news?sq_content_src=%2BdXJsPWh0dHBzJTNBJTJGJTJGZWJpenByZC5wb2xpY2UubnN3Lmdvdi5hdSUyRm1lZGlhJTJGOTc2MzguaHRtbCZhbGw9MQ%3D%3D" target="_blank">their website</a> that naming the dogs became a wonderful distraction for the kids, who had to spend time in the hospital for various reasons. Eight-year-old Alice chose the name Cody after being inspired by this closest to her. She said, “I wanted to name the puppy Cody because my best friend’s name is Cody, and dogs are her favourite animal.” Minister for Police and Emergency Services David Elliott welcomed the new furry recruits, thanking those who named them. “These pups represent the next generation of the Force’s Police Dog team, one of the most highly-trained and respected in the world,” Mr Elliott said. “I join the children, who named the pups, in following the progress of the C-litter; I know they will achieve great things in the future,” he said. Image credit: NSW Police

Family & Pets

Wild Republic: The new drama thriller set in the Alps

Dubbed the “Lord of the Flies for a new generation”, Wild Republic is the latest series to take inspiration from the classic novel. The German television series starts with a bunch of juvenile delinquents who are undergoing an experiential rehabilitation program in the rugged German Alps. <img style="width: 500px; height: 250px;" src="https://oversixtydev.blob.core.windows.net/media/7843508/luis_zeno_kuhn-fotografie-munchen-03363.jpg" alt="" data-udi="umb://media/2e998bf45e6343b482cc559525562674" /> Image: SBS Following the sudden death of one member, the troubled youths face a tough choice: wait for the authorities to investigate the crime or take fate into their own hands and make an escape? <iframe width="560" height="315" src="https://www.youtube.com/embed/tO0LVkF-Vuk" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe> Directed by Markus Goller and Lennart Ruff, the eight-part series tackles issues about how to survive, what choices are made, and at what cost. <img style="width: 500px; height: 238.57142857142858px;" src="https://oversixtydev.blob.core.windows.net/media/7843509/wild_republic.jpeg" alt="" data-udi="umb://media/584d5f7e05394894bbb871d15f9e9387" /> Image: SBS The series is now exclusively streaming in German with English subtitles at <a rel="noopener" href="https://www.sbs.com.au/ondemand/program/wild-republic" target="_blank">SBS On Demand</a>. Image: SBS

Broadcaster apologises for offensive bungle

A Dutch public broadcaster has been forced to apologise for wrongly subtitling the German national anthem using Nazi-era lyrics while it was being played before the team’s Euro 2020 match against England. NPO issued the apology on Twitter, with the account saying “the wrong verse was accidentally shown” and apologising to viewers who were offended by the error during the match on the morning of Wednesday, June 30 (AEST). “During the live subtitling of the German national anthem at the European Championship match England-Germany, the wrong verse was displayed by mistake,” NPO said on Twitter. “This was a mistake by one of our subtitlers. We apologise to viewers who were disturbed by this.” The verse beginning with the words “Deutschland, Deutschland ueber alles” was removed in 1945 following the end of World War II due to its association with the Nazi regime. The lyrics include the line “Germany, above all, above everything in the world” - which summed up Hitler’s desire to take over the world. Image: NPO

Mind

Germans turn to the woods for mindfulness

Of all the German words without a direct English equivalent, one has seen a resurgence during the coronavirus epidemic. Waldeinsamkeit - which translates to “solitude of the forest” according to Google Translate - can be best described as the sublime feeling that can come from being completely alone and at peace in the forest. With more free time, flexibility, and pressure at home - without many other options to occupy free time - Germans are visiting forests to find that kind of solitude in greater numbers than before. Recent research by the European Forest Institute has confirmed it, finding that visits to a monitored tract of woods in North-Rhine-Westphalia experienced an unprecedented jump in visitors during the first and second lockdowns. The authors concluded that forests were a critical infrastructure for national public health and society at large, with the German people once again seeking forest solitude during the pandemic. “In our recent study, visitors said finding tranquility was by far the number one motivation to go to the forest,” European Forest Institute researcher Jeanne-Lazya Roux said. “Another new study we are working on shows there is a renaissance in valuing forests for their spiritual attributes, or re-spiritualisation of the forest, as we call it.” A resurgence Professor Nikolaus Wegmann, a Germanist and literary historian at Princeton University, told the BBC waldeinsamkeit is seeing revalidation as people absorb the philosophy of the word in their post-pandemic lives. “On one level, waldeinsamkeit is a simple compound of the word ‘forest’ (wald) and ‘loneliness’ (einsamkeit), but on another it represents the soul and deeper psyche of Germany,” said Wegmann. “Nowadays, the term is taking on a new meaning because of coronavirus: the isolation and loneliness of the forest, in contrast to the world of the city, is increasingly attractive.” With 90 billion trees, 76 tree species and about 1,215 species of plants within Germany’s forest, which cover 33 percent of the country’s land area, it’s not hard to see where the attraction comes from. “The concept of going into the woods is part of everyday life for us Germans,” Wegmann said. “Even though we’re one of the most industrialised nations in the world, you don’t need to go looking for a forest here. We are forest people, even as far back as the Roman empire when the Romans described us as such.” Over time, the term has come to represent Germany’s culture too, with many throughout history citing the practice as a cure for stress. “Waldeinsamkeit is a visible strain throughout German culture and history and the term might have fallen out of favour, but it continues to convey a very romantic notion of the country,” said Austen Hinkley, a doctoral candidate at Princeton’s Department of Comparative Literature. “The claim the term is untranslatable and indescribable to non-Germans is also important. It can only really be explained by first-hand experience - total immersion in the German landscape.” Image: dinner / Instagram

International Travel

Don’t leave me: Dog tries to stop trainer from retiring

Viral footage from China has captured the touching moment a detection dog tried to stop its retiring handler from leaving. The German Shepherd, named Bei Bei, can be seen holding onto the officer’s duffel bag with its mouth, unwilling to let go. It even tries to stop the car door from closing, and chases the moving vehicle after the trainer bids a tearful goodbye to his loyal friend. Millions of social media users were moved by the animal helper and the “true comradeship and love” between the sergeant and his four-legged partner. The retiring sergeant, Zhang Wei, was leaving the barracks in China’s north-western region Xinjiang when the <a rel="noopener" href="https://weibo.com/tv/show/1034:4542480302145580?from=old_pc_videoshow" target="_blank">footage</a> was filmed, according to Chinese media reports. During his retirement ceremony, the officer is seen handing over the sniffer dog to his colleague as he prepares to leave. As Zhang hugs another officer to say goodbye, Bei Bei suddenly bites the corner of his duffel bag, seemingly trying to stop its handler from leaving. The sergeant immediately bends down and gives the detection dog a kiss, trying to hold back tears. After Zhang climbs into the military van, Bei Bei barks profusely before eagerly running towards the officer again. The hound is seen resting its paws on the vehicle door, unwilling to move, as the officer rubs its head and waves goodbye. Bei Bei even tries to chase the moving car carrying its beloved best friend, before being pulled back by another officer. The heart-warming video has touched millions of Chinese citizens, with one commenter writing: “This has brought me to tears. This is the kind of real and inseparable friendship!” IMAGES: Weibo/js7tv

Family & Pets

Why retail workers are wearing a second badge

Since the start of the pandemic, retail workers have been at the forefront of people’s frustrations as they copped abuse on the daily. In April, one woman was filmed racially abusing workers at a Telstra store in Sydney, telling a staff member to “go back to China, while this week another customer berated retailers over their face mask policies, saying such views “have no basis in science or fact”. In a bid to curb the rise of abuse, particularly during COVID, staff at some of Australia’s biggest chains will now wear a second name badge. Employees at stores such as Woolworths, Target, Big W and KFC will have a tag on their uniform stating either “I’m a mother”, “I’m a father”, “I’m a son” or “I’m a daughter” to remind customers they are someone’s family member. A Woolworths employee recently went viral on TikTok after she explained the importance of the badge. “A lot of people have been asking on my videos what this says and it says ‘No one deserves a serve, I’m a daughter’,” Dakota Rae Shaw said in the video. “Basically the union brought them out to us so that people could imagine if it was their daughter they were speaking to.” <img style="width: 323.727px; height: 500px; display: block; margin-left: auto; margin-right: auto;" src="https://oversixtydev.blob.core.windows.net/media/7837116/screen-shot-2020-07-29-at-30527-pm.png" alt="" data-udi="umb://media/e6d21d25f98e44dd8f805dd04bf6cbd9" /> According to the union, over 85 per cent of workers are being abused while they work. SDA NSW secretary Bernie Smith said there has been a reported 44 per cent reduction in customer aggression since the badges were rolled out. “The idea of the badges is to humanise the person behind the counter, so the customer sees them as a person rather than somebody processing their sale,” he told Yahoo. “They’re someone who’s part of a family and part of a community, and the badges make people think twice.” A Facebook user recently shared her experience of a staff member wearing a badge saying “I’m a son” at Woolworths store at Lennox Head, on the northern NSW coast, on Saturday. “He was wearing a second badge … I started asking questions as to why, and he said it was an attempt stop the abuse that they cop,” she wrote. “He said he hasn’t experienced it in Lennox yet but in Byron Bay he did all the time because of (in his words) ‘the sense of entitlement most people there had’. “It breaks my heart that young people just trying to do their job, especially during a pandemic, have to put up with this c**p. “If you witness it, call it out. Not ok.”

Travel Trouble

Madeleine McCann case leads to German police digging in back garden

<div class="post_body_wrapper"> <div class="post_body"> <div class="body_text "> German police are currently investigating the disappearance of Madeleine McCann in Portugal in 2007 and have searched a garden plot in the city of Hannover in connection with their probe. Julia Meyer, a spokeswoman for the prosecutor's office in Braunschweig, confirmed to local media that police investigators had been at the garden plot since Monday. Meyer said she could not give any further details on the procedure, adding only that police would “still need some more time to finish.” At the time of writing, it is not clear what police believe might be at the site they are searching. Sniffer dogs, a tent with observation technology, an excavator as well as a large team of police have been spotted at the scene. <img style="width: 0px; height:0px;" src="https://oversixtydev.blob.core.windows.net/media/7837107/maddy-body.jpg" alt="" data-udi="umb://media/3705bfcb53964e92964ac0e7e10e0e23" /> It is understood that the investigation of the site will continue until Wednesday. Madeleine was three years old at the time of her 2007 disappearance from an apartment while her family vacationed in the town of Praia da Luz in Portugal. German authorities have since identified a 43-year-old German citizen as a suspect in the McCann case and are investigating him on suspicion of murder. </div> </div> </div>

Legal

Madeleine McCann’s parents respond to German prosecutor’s claim

Madeleine McCann’s parents have denied they received a letter from German authorities stating that their daughter is dead. In a statement released Tuesday on the Find Madeleine website, Kate and Gerry McCann said they have not received a letter regarding proof of their daughter’s death. “The widely reported news that we have a received a letter from the German authorities that states there is evidence or proof that Madeleine is dead is FALSE,” the parents said in the statement. “As we have stated many times before, we will not give a running commentary on the investigation – that is the job of the law enforcement agencies and we will support them in any way requested.” The statement came after German prosecutor Hans Christian Wolters told UK newspapers he had sent the family a letter explaining German authorities believed Madeleine was dead but could not reveal the evidence. Wolters said German police has “concrete evidence” that the missing British girl was murdered by Christian Brückner, a 43-year-old convicted sex offender. “We have concrete evidence that our suspect has killed Madeleine and this means she is dead,” Wolters was quoted as saying by the Daily Mail. “I sympathise with the parents but if we reveal more details to them it might jeopardise the situation.” He insisted his team had sent a letter to the McCanns. “I’m not able to say whether the letter has reached the family or is still on the move,” Wolters told The Sun. Madeleine McCann disappeared from the Portuguese resort of Praia da Luz in 2007. She was three years old at the time of her disappearance.

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I chose the electricity retailer offering the best deal for my home. That’s not what I got

I chose the electricity retailer offering the best deal for my home. That’s not what I got

Paws up! Six puppies join the NSW Police Dog Unit

Wild Republic: The new drama thriller set in the Alps

Broadcaster apologises for offensive bungle

Germans turn to the woods for mindfulness

Don’t leave me: Dog tries to stop trainer from retiring

Why retail workers are wearing a second badge

Madeleine McCann case leads to German police digging in back garden

Madeleine McCann’s parents respond to German prosecutor’s claim

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