A couple of weeks ago we went to IKEA to pick up some light bulbs for some of our lamps. I was a little surprised to find out that IKEA had started charging a nickel apiece for plastic bags. We don't go to IKEA often, and the bag charge had been around for a couple of months in the US at that point, and for almost a year across the pond. IKEA also dropped the price on its gigundous heavy-duty reusable happy blue shopping pouch by 40% to 59 cents.
This move is good for the environment. But what you probably won't hear through all of the sunshine-blowing is that this move is also quite good for IKEA:
- Plastic bags cost about a penny to make. Selling them for a nickel means a 400% markup, which is huge in retail. Even with the $1.75 million maximum they'll be contributing to American Forests this year (the proceeds for up to 35 million disposable bags), the tax write-off will just about pay for the bags.
- There's no word that the contributions will continue next year though that's not set in stone. After the 12 months are up all of the proceeds stay at IKEA.
- The customers buying and using the reusable bags are paying for the privilege of advertising for IKEA.
(I'm not capitalizing IKEA for any particular emphasis; that's how the company's name is spelled.)
Words from Pernille Spiers-Lopez, president, IKEA North America:
We realize that our ‘Bag the Plastic Bag Program' is a small step. But we know our customers want to help and support the sustainability of our planet – for today – and for the future of our children. IKEA believes home is the most important place in the world. And what more important home is there than our planet? This program lets our customers know we have our stake in the ground and are committed to continuing to be an environmentally responsible company. IKEA has always been a home furnishings retailer for the many people. This program reaches out to everyone and embraces the idea that together we can do a lot!”
This is a great example of sunshine-blowing: First, regardless of whether or not I want to support the sustainability of the planet, how can you assume that I do? Second, it's certainly a compelling choice to promote the “together we can do a lot” mantra when the customers are footing the bill. Third, why such a “small step?” If the goal really is to reduce the number of bags, the fastest way to do that is cancel all corporate orders for them and sell off the checkout-lane plastic bag holders in the as-is section. That would reduce the number of plastic bags put into the environment by IKEA by 100%! Done! But this combination of expense reduction, profit seeking, and public relations coup has less of a positive environmental impact than it could. It sounds more like: “Helping the environment is good, but if you don't want to, that's all right! We'll gladly take more of your money.”
Now before I tag myself as an enviro-hater, I do recycle most of what I can and refrain from taking more bags than I really need. I also re-use the plastic bags I get in a number of ways. (Hey, it's good for my bottom line!) A much more effective way to get customers to cooperate is to reward them for not using the bags. I'll bring bags back to Ukrop's and re-use them to get 3 cents off per bag. That's something I can get into: share the savings with me! Again, it's good for my bottom line. Being green means getting green.
Or just don't offer me bags in the first place: Costco has a huge bin of product packing boxes that work fine. I'd rather have a clear picture why a company does what it does — which is to make more money — than to have to figure it out. Costco didn't do plastic bags because they cost money. That's how they cut costs, and that's how they pass the savings onto the members. I'm with them on that one.
IKEA's goal is to make money too, but covering it with several layers of warm fuzzies as my hand is being forced rubs me the wrong way. If they had instead asked me to not use a bag, I probably wouldn't have used one!
Good investigating. Corporations are grabbing on to the 'environmental' sell very quickly. From what I've noticed, most of these enviro-friendly ads are just another way to get you to spend more.
Disappointing. Almost as disappointing as the meatballs in the IKEA commissary
I'm confused, you say it would be okay if they didn't offer bags at all but are mad that they give the choice of purchasing bags? Really? Why?
an addition. How do you know they aren't sharing the savings with you? Maybe with the reduced bag cost they can lower their prices ever so slightly.
Thanks for your comments!
CK, I don't really mind that they're giving me the choice of purchasing bags. What I disagree with is how they're blowing sunshine my direction and making assumptions that my values are the same as their values in order to further their ends.
As another example, I was asked on two recent flights to give up my aisle seat. One person asked me directly. The other one approached it by saying that "it was my turn to get the window seat." I don't really care about the window seat, it wasn't "my turn," and the real purpose was for me to give her my seat.
Does that answer your confusion? If not I'll try again.
Like CK, I'm also confused. You praise Ukrop's for charging you *less* when you bring in your own bags to use. You disparage IKEA for making you pay *more* for *not* bringing in your own bags to use. How are these not the same?
Let's assume that the two places (now just Store A and Store B) sell the same products at the same prices. So if you buy Product X from both A and B, and they give you a plastic bag, you pay $1.00 at each place. At Store A, the "sticker price" of Product X is $1.00 but they rebate you $0.03 when you use your own bag. At Store B, the "sticker price" is $0.97 but they charge you $0.03 to buy a plastic bag. They're the exact same thing! But you seem to prefer Store A.
At both places, you have an economic incentive to not use plastic bags, but you still have the option to do so. It's just the way that the option is presented to you that seems to get your goat.
You say they're "assuming that your values are the same as their values." Well, not really — that's why they're charging you for it! Their values are clear. Your values are not. If they assumed that you agreed with their values, then yes, they would just drop bags completely. They are charging you for bags to give you a reason to support their values — it'll save you money, which any rational person can see is in their own best interest. Their reasoning is "Even if customers don't want to support the environment, surely they will want to save money, so we can create a program that can do both."
Some US cities have gone so far as to ban plastic bags. Apparently some entire countries are considering doing it as well. Plastic bags are becoming a big environmental issue in a lot of places. Personally, I reuse them to line small trash cans, carry lunch to work, etc. I usually end up with a lot more than I will ever use, so I end up putting a bunch of them in the recycle bin every so often.
I know this is a finance blog, but Americans as a whole need to learn to waste less. Recycling plastic means less raw petroleum to produce new plastic. On a large scale the decreased petroleum demand could reduce the cost of gas. Granted, the scale would have to be large, but many people don't tend to think about things like that.
It's the same thing with all recycling, and using more energy efficient products. Less energy consumption equals lower prices and more resources for everyone. At least until people come up with new ways to waste energy…
Prices are also going up in shipping so it might save you money without you realzing it. Co are there to make money.
You're plain wrong on this one.
An outright prohibition pisses customers off mightily.
"Costco doesn't use bags" is disingenuous: Costco doesn't sell most of their things in packages small enough their lack of bags matter. Your friendly neighborhood grocery or Ikea would quickly run out of boxes if they tried something similar.
Economically speaking, "Sin taxes" have a wide acceptance places where outright prohibition causes backlash of a prolonged nature . People get pissed at first about sin taxes, but they cause a subtle and gentle acceptance of the new behavior over time. (You buy less booze that you would otherwise because of how expensive it is. The sin tax on it is effective). The "Wiskey Rebellion" is an exception on this matter.
Sure, someone collects the money from a sin tax. Always happens that way. However the behavior it's against does lessen. And people don't get so up in arms about it that they tar and feather you in the village square, or in the case of Ikea, throw out 10% of their customer base.
As long as there is a buck to be had, you will find any business's "eco-friendly" move to be heavily branded, moderately priced, and fully in-line with their advertising campaign.
Like the guvernator said, make it sexy…
Thanks for the comments again!
@Gaming the Credit System: From the IKEA spokesperson's quoted text: "… But we know our customers want to help and support the sustainability of our planet – for today – and for the future of our children." That sounds like they're assuming I have the same values they do. And you're right — the presentation bugs me. It seems like they are trying to distract the issue, much in the way a pickpocket bumps into you or has his buddy distract you while he's grabbing your wallet. That bugs me. And I don't quite agree that IKEA's and Ukrop's are doing the same thing — I now get less for the same amount of money at IKEA (same price, no bags) whereas Ukrop's takes money for the bags right off my bill if I don't use them.
@Patrick: I re-use them in many of the same ways you do.
@Michael: I'm not sure we disagree exactly. It's the presentation by IKEA that bugs me. If you want to charge me for bags, that's fine, Just do it and move on. Don't cover it with layers of BS.
It's just marketing. It infiltrates everything, trying to make us feel all warm and fuzzy. That being said, I do think we should reduce the number of plastic bags we use. I used to give them to my friend for cleaning her litter boxes, but she just moved away. I thought I might use them to pick up my new dogs' backyard landmines, but I find that the plastic wrappers on our daily WSJ and the annoying advertising that gets dumped on my sidewalk weekly are perfectly good for that. Last week I purchase 8 reusable shopping bags (http://www.reusablebags.com/store/acme-bags-earthtote%E2%84%A2-heavy-duty-reusable-shopping-p-10.html) for my grocery trips. I love them and will keep them in my car for whenever I go shopping, grocery or otherwise. I am tired of throwing stuff away constantly.
It’s funny that we have just started think9ing about reusable grocery bags. In Europe we would go shopping every day for 20 minutes after work and always use our own shopping bags.