Buying at a discount

Growing numbers of consumers are pocketing cash savings by shopping for a wide variety of merchandise — digital clocks, typewriters, cameras, color TVs, even cars — through “buying services” that discount many list prices by one-fourth or more. Scores of these services have sprung up around the country; the New York area alone has more than two dozen.

Some outfits, including United Buying Service (1855 Broadway, New York, N.Y. 10023), give the customer the name of a nearby merchant who will sell the desired item at the promised discount. To deal through United, you have to belong to an affiliated organization, such as an employee group. Another kind of operation, typified by Unity Buying Service (P.O. Box 1033, Mount Vernon, N.Y. 10551), offers its discounted wares through mail-order catalogues sent to dues-paying members ($6 a year at Unity). A third, increasingly popular kind of service maintains its own showroom and stocks its own warehouse, thus competing with conventional retailers and discount houses right in their own neighborhoods.

For $7.50, Car/Puter International Corp. (1603 Bushwick Avenue, Brooklyn, N.Y. 11207) will provide a computer printout of the price dealers pay for any American car and most foreign models, with options. Through almost 400 cooperating dealers Car/Puter can then arrange purchase of most cars for $125 over dealer cost, saving the buyer up to $1,000 on an expensive car with numerous options. (Other services also arrange car purchases at $100 to $125 over cost but do not provide computerized price data.) Car/Puter and many other services, including most of those with showrooms, welcome all comers.

Our table samples prices available last month on a pair of typical items: a Polaroid camera and a portable electric typewriter. The percentage figures represent approximate discounts from the list prices. (Korvettes, a conventional discount chain, operates in the East and Midwest; Evans Distributors is a showroom discounter in the Washington area.) Remember that many conventional stores charge less than list price, so the discounts shown here are probably smaller than they seem. Before dealing with an unknown discounter, check prices locally.

Though some competitors — automobile dealers in particular — hint at the existence of problems, warranty servicing on cars and other products purchased through these firms appears to be no more (and no less) of a problem than with purchases made elsewhere. Delivery of orders and refunds on undelivered or defective goods are sometimes delayed, especially by some of the mail-order operations, but this is not unknown when you are dealing with conventional retailers.

There is, of course, no arguing with the buying services’ primary advantage: the money saved is real.

Bad taste

The revolted gentleman to the right is Mister Yuk, a new poison symbol designed to warn preschool children against sampling lethal substances such as drain cleaner, ammonia and furniture polish. Looking for a suitably repugnant device for parents to paste on hazardous household chemicals and medicines, the Poison Center of Pittsburgh Children’s Hospital first tried the skull and crossbones but found that toddlers were actually attracted by it. Mister Yuk, an obnoxious green variant of the ubiquitous smile button, emerged from further experiments as the man most likely to be noticed yet avoided. Circled with the Poison Center’s first-aid phone number, he decorates millions of stickers being distributed in the Pittsburgh area. Parents there are urged to paste Mister Yuk on all toxic items in the house and to teach their children that he means danger.

The compleat griper

Because consumers are complaining more, many corporations have installed ombudsmen to field gripes and try to do something about them. Government agencies, too, have grown more sensitive to letter writers who feel themselves wronged.

Many of these consumer specialists have a complaint of their own. Letters from outraged consumers tend to be long winded and short on facts. The Consumer Affairs Department of New York City receives hundreds of letters a day, many of them with barely a clue to who cheated whom out of what.

Two alert Boston businessmen have devised a booklet, The Telegripe Complaint Kit, to make complaining easier — for complainant, ombudsman and government officials alike—and to put some order into your outrage. The booklet contains instructions on how to complain effectively (“… the best reply is a written reply. If you want only a written answer, do not list your phone number”) and 32 urgent-looking forms called Telegripe Complaints. The kit, complete with carbon paper and a complaint record chart, can be ordered from Infact Systems, 80 Boylston Street, Boston, Mass. 02116. Price: $1.29.

This is the month to buy:

Coats for men and women. You might think prices of winter clothes would be peaking at this time of year. Not so. Many stores will be putting them on sale, especially for the major autumn shopping holidays —  depending on where you live, Columbus Day, Veterans Day, Halloween or all three.

Air conditioners. Appliance stores are loaded with them because the dog days came late in many areas last summer. Manufacturers’ rebates will spur markdowns. The same goes for dehumidifiers.

Beef, maybe. Sharp drops in August wholesale prices sparked predictions that the reductions will be passed on this month to consumers. Watch the papers for supermarket specials on steaks and roasts. It might be a good time to stock your freezer; low prices aren’t expected to last.

Television sets. Dealers have been moaning more than usual about low prices, so markdowns for the traditional October sales should produce some almost irresistible deals on both color and black-and-white sets. Some 1973 models will be sale priced as attention getters, but you’ll find the most interesting price tags on 1972 model color sets.

Compounding the infinitesimal

Competition for depositors has always been hotter among city savings institutions than in the suburbs and small towns, because the big money markets are in the cities. With interest rates long ago having reached the legal ceilings, a favorite gimmick for luring new accounts is to shorten the traditional quarterly interval for compounding interest. Savings and loan associations in southern California, hungry for mortgage money, offered daily compounding as far back as 1963. More recently, institutions in Atlanta, Chicago and Houston joined in the movement. The interval has now been shortened as much as possible. A few months back, savings banks and savings and loan associations in metropolitan New York promised to compound every day, every second or — ultimate of ultimates — continuously. New York’s Dime Savings Bank promoted its switch from quarterly compounding this way: “Thanks to daily compounding, Dime families get a little richer every day.”

True enough, but just how little neither Dime nor its competitors cared to say — and no wonder, because for the average depositor, the difference in compounding intervals will amount to, at most, pennies a year. Specifically, $1,000 left on deposit for one year at a nominal annual rate of 5% yields the following year-end balances at various compounding intervals:

Quarterly: $1,051.67

Monthly: 1,051.89

Daily: 1,052.00

Continuous: 1,052.00

Continuous compounding, computed with a logarithmic formula, does offer a minute advantage over longer compounding intervals, but it is too small to show up in our calculation. Pretty clearly, the interest gained by moving a savings account from suburb to city is hardly worth the carfare. end