Please tell me your definition of "fair" using the following "real world" math problem?
This will be a complex “word problem” which will use your math and reasoning skills to test your personal concept of equity and fairness. Note however, this question, though based on a real world occurrence, is entirely hypothetical, the answer you give can not be “right” or “wrong”, it will not affect anyone’s behavior in the real world or change anything that has happened or will happen, and is simply a “fun” thinking exercise, if you are the type of person who believes that this kind of analytical thinking is “fun”. So, here goes.
One Sunday afternoon while helping my 11 year old son with a rather repressive amount of homework, I decided to give him a “fun” break between problems and take him out of the house for about an hour so he could tackle his remaining homework with a fresh mind and a positive attitude. I chose to take him to Game Stop to look at used video games, and I told him if he wanted to buy any games, he would have to spend his own money. Now I certainly buy my son plenty of things including video games, particularly for birthdays, Christmas and to reward accomplishments, but I don’t just buy him whatever video game he wants just because he wants it. And certainly I want to teach him the value of money by making him spend his own money on his own wants.
There was one particular video game on which he had his heart set, and was hoping they would have, though being a new game, I told him even if they did, it could cost $50 even used. He said he’d be happy to pay $50 for the game, and sure enough we found it for $44.99 plus tax, which is 7.125% where I live. Were that to have been the only purchase, this game would have been $48.20, slightly less than the $50.00 I quoted him. He handed me a $50 bill, and I intended to give him the change.
Consideration 1 – for me this is not a consideration, but for some it might be – transportation. Some might say to be fair, since the whole point of going to the store was to do something nice for him, it’s costing me money and he should reimburse me. The estimated fuel costs for this round trip for my vehicle come out to be $2.38 while the estimated “reimbursement” value, i.e. what I could claim for total transportation costs per the IRS deduction value would be $5.68. Personally, I would never expect my child to pay for any transportation, but I’m interested in YOUR assessment of fair.
So, back to the story. Game Stop has a rewards program that costs $14.99 per year (not taxed), and it entitles you to 10% off used video games plus a subscription to Game Informer magazine. On his game alone, this membership, which I did not have as I haven’t been in the habit of buying too many games from Game Stop, would have saved him $4.50 plus tax, or $4.82. He however had no interest in the magazine and would never have considered buying the membership given that he doesn’t buy most of his own games. But I, sensing a deal, realized that there was another game I was interested in, which was also $44.99, and it occurred to me that with these two games alone, I’ve already have saved nearly ⅔ the price of the membership, which would “pay for itself” with just one or two more games.
As it happened, there was another game in which my son was also interested, this one was available for $37.99 plus tax, or $40.70, but were I to purchase the discount card, that price would have dropped to $34.19 plus tax or $36.63.
Consideration #2 – At this point, were my son to have purchased both games at the sticker price, it would have cost him $88.89. If one of us were to purchase the discount card for $14.99, it would have cost him $80.00, a savings of $8.89, but in net, a cost of $6.10, were he to have purchased the card himself.
By me buying my game and saving 10%, I would be able to save $4.82 of this $6.10, making the cost of a one year discount card plus magazine subscription only $1.28. So, my consideration is that I would only need to spend $12.80 including tax, or $11.95 plus tax on a single game at any time in the next year for the membership to pay for itself overall. But as you can see, how to split the cost of the membership, the benefit of the discounts and such, is making this all the more complex.
Consideration 3 – He may play my game and I may play his, but mostly he will play his games and I will play mine. We will both probably look at the magazine when it comes but neither of us really cares that much about it. If he buys any more games with his own money I will let him use the discount, and if I buy any more games either for myself, for him as a gift or for anyone else, I will use the discount.
Now, the final enticement, which made it a no brainer for me to buy this membership was that they were running a promotion. Sign up for the membership now, register it online and in a couple days, you will receive a coupon for a buy 2 used games, get one free. To sweeten the deal, I would have been allowed to either buy all 3 games and come back with the coupon and my receipt to get a refund for the lowest price of the 3 games (which as you recall was $36.63 with tax), or just come back and pick out a game if I bought the two. I opted for the former deal, and purchased the 3 games @ $115.17 plus $8.21 in tax or $123.38, plus $14.99 for the membership, or $138.37. My son had paid me $50, making my out of pocket $88.37, and knowing I would get a refund of $36.63, my total out of pocket was $51.74. Now, had I purchased only the game, it would have been $48.20, and had I purchased the game plus the membership, I would have spent $58.37, but I would have gotten a coupon for buy 2 get 1 free on a future purchase.
Consideration 4 – Neither of us had any other games we wanted between now and when the coupon ends.
Now, to make matters more complicated , on my return, the two games which had been $44.99 ($40.49 with the discount) had changed in price to $37.99 (or $34.19 with the discount) plus tax of course. So, in addition to the $36.63, they also price adjusted each game downward by $7 less 10% plus tax, aka $6.75 each or $13.50 total, giving me a grand total refund of $50.13. This makes my out of pocket $38.24.
So, I think that’s fair, because I’m not one to quibble over a few bucks, even with an adult, certainly not with my own child. In the end, if I’d gone into that store and just bought that one game, it would have cost me $48.20, and not only did I get that game for $9.96 LESS, but I also get 10% off my purchases for a year, AND a magazine subscription, plus I get to play 2 other games my son bought if I want. I’m happy, he’s happy, and I think it’s fair.
But one could say, wait a minute, he paid $25 per game, you paid $38.24. To be 100% fair, the TOTAL cost of the 3 games plus the discount being $88.24 should be split 3 ways, me paying $29.41 and him paying $58.83, so he should pay me an additional $8.83. Add $5.68 to that for transportation and he owes you $14.51. Or maybe since I bought a game as well, I should eat ⅓ of the transportation cost and make it $12.62. Or possibly one could say that making him pay for wear and tear, maintenance, cost of the car etc. isn’t intrinsically “fair” as I own the car and would have to pay for these things anyway, so maybe he owes me ⅔ of the cost of just the gas, making it $10.41.
Or, one could say, I would have paid $48.20 for my game, so being a “good guy”, I really should only expect him to pay the difference between the total cost of the 3 games plus the membership less $48.20, or $40.04, so I owe him $9.96 (the amount I saved because of the membership, because after all, he bought it).
Or you could go with the position that it was my idea to buy the membership, he should pay what he would have paid for both games with NO benefit of the discount ($88.90…even though total out of pocket for all 3 games was only $88.24), plus the full cost of transportation INCLUDING wear and tear, so he should actually “owe” me $43.92. Hell, for that matter, you could factor in the cost of the second trip and he’d end up owing me $48.60. Though I can’t imagine anyone on Fluther coming up with this answer, believe me, I’ve known people petty enough to say that would be “fair”.
By my figuring depending on your definition of fair, the real answer is somewhere between I paid $10 too little or $10 too much. My definition of fair is that we’re both happy, we both got a great deal, and even though I paid a bit more for my game than he did for either of his, and even though I paid for the gas, I’ll probably reap more rewards from having this membership, even if it’s only because of the money I’ll save on gifts for him. And as I’m not one to quibble over ten bucks, this seems in a way “more than fair” to both of us in every possible way.
Bottom line is, the purchase is made, we’ve both paid what we’re going to pay, and as far as my son and I go, there is no haggling, he doesn’t feel cheated, nor do I, and I do not feel as though I’ve cheated him and don’t believe he feels he’s cheated me.
But, I asked this question, because I’m kind of a math geek and I love to play with numbers, but also, I like to know how people think. Tell me what YOU think is fair and why, show me your thought process, do the calculations and support your opinion. And have fun…if this does not sound like a fun exercise to you, by all means, do NOT bother yourself with it.