Have you ever noticed that the prices of items at a convenient store are significantly more expensive than identical items at a grocery store? Have you ever noticed that, although it is a one-stop shop, the size of a Walmart Supercenters is 175,000 sq. ft. on average? We know that the rich get richer and the poor get poorer, but there are very few identifiable expenses that explain the difference.
One reason is convenience charges. Unlike buying tickets off Ticketmaster or other online retailers, where “convenience charge” appears on the itemized receipt, most convenience charges are explained only by strange pricing differentials. Your closest convenience store is not going to sell as many gallons of milk as your grocer for a couple reasons. One, because the price of milk is more expensive at the convenience store. Two, because there are so many more convenience stores than grocers. Whether one is a chicken and the other is an egg, I do not know. But a convenience store will earn more on each unit of milk sold – while a grocer will have lower margins and a higher volume of sales.
Why buy from a convenience store, instead of your grocer? There is no discernible reason to, unless you just like paying more (which, arguably would be the opposite of reasonable, as the I-didn’t-pay-enough tax fund in Arizona has proven). Except, there is a matter of convenience.
It is easier to drive a block to the closest convenience store to buy milk than to go to your local grocer or even a Walmart Supercenter. The building is smaller, so everything is closer together. The higher prices limit the number of customers, so there is no wait. You can get a gallon of milk in five minutes from a convenience store, or you can spend 20 minutes going to Walmart and back. Time is money, so there are people willing to pay for convenience.
Your pizza order is going to be subject to a delivery charge if you have it brought to you. (Ditto for Grubhub, UberEats, Postmates, and the like.) We know them as a delivery charge. A convenience charge by any other name would still reach as high.
What is the problem with convenience charges then? They become very expensive if you do not realize when you are paying them. If you cannot be bothered to leave your home for a meal, and you want fast-food instead of preparing something at your house, then you have every right to order delivery – but it comes at a price. You could have saved more by slightly “inconveniencing” yourself, either by planning ahead and stocking cupboards with easy meals or by stopping at a drive-through before coming home.
The great debate among people who say that they never splurge is when they rack up these expenses repeatedly – daily, even multiple times a day. Not being aware of how much more you pay than you should does not mean it does not exist. When the counterpart of the debate say they are living below their means, this is a big part of what they mean. They can afford convenience charges, but they opt for more inconvenient options to avoid them. They can afford bigger homes or nicer cars, but they transfer the benefits obtained from those purchases and redirect it elsewhere, most likely into their own wealth accumulation. I remember going to lunch with a friend of mine who had a (quite frankly) surprisingly nice car! I told him how great his car looked, to which his kneejerk reply was, “thanks, I’m not sure it is worth how much I pay for it.”
There are conveniences that come with a nice car, to be sure, but whether the sum of those conveniences match the price is another issue. The hidden expenses of a nicer car, including the higher quality tires and more expensive repairs and maintenance, add up subtly.
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