An Age of Transparency

I had a borderline arbitrage idea awhile ago. Please keep in mind this was only a thought, never something I would have executed on for ethical reasons. At least it used to be that you can use an empty Amex, Visa, pick-your-poison gift card as a placeholder for your one month free tirial of Netflix, Hulu, or another service. So what if you bought these empty or near-empty gift cards from people and then soldshort-term memberships to these services to others? Win-win right?

WRONG! On an ethical note, you can argue that you’re helping Netflix and friends because you’re directing users to the platform but it’s basically theft.

The reason this likely would not work from a business perspective is that it lacks transparency. You were creating a buyer-seller market in which people did not know the other party. If people knew both sides of the business, they would likely do it for themselves in some way. Even if they would not they would feel cheated. In todays’ world this is not how you go about keeping a customer.

A famous story helps paint this picture. Coke experimented with a machine that priced dynamically based on temperature and it went horribly. While it showed promise to boost revenues and did initially, once people found out they were furious.

On the other hand, companies like Lyft simply tell you that you are about to be charged more than usual. At least you are signing off on what they are doing! And consumers are completely okay with this.

My point in all of this is that it is so important to tell your customers what youre doing. They like feeling valued and understood, not gouged.