Bigger Is Not Always Better
July 08, 2015I recently took my son to a local family entertainment center to escape the heat and enjoy a little bowling, laser tag, and arcade action with his friends. After a few hours of running around, they all started to get thirsty so I walked up to the concession stand to purchase drinks. They offered drinks in three sizes: 16, 24, and 32 ounces. The 16 ounce drinks were $1.75 and the 32 ounce drinks were $3.25, making them a slightly better deal.
Always being one for a good deal, I purchased the 32 ounce drinks hoping that it would be enough to satisfy them—apparently I was wrong. I walked back up to the counter to purchase another round of drinks when I noticed some fine print on the pricing board advertising all drink refills for 50₵. I kicked myself for not noticing this earlier as the kids had already discarded their cups, but I asked the nice lady behind the counter if she would be willing to provide the drinks at the refill price. She obliged.
As I sat down at the table to hand out the beverages thinking that I had just scored a major financial victory, I started to do some math in my head. It slowly occurred to me that I may not have been the financial genius I thought I was. In hindsight, I could have purchased 16 ounce drinks at a $1.75 each and paid for a 50₵ refill, providing a total of 32 ounces of liquid refreshment for a buck less per drink than purchasing the 32 ounce sized cup. Boy, did I feel stupid.
Never wanting to let a teachable moment go to waste, I used this opportunity to instruct the kids on the principle of the per unit size. You are probably already familiar with this concept, especially if you ever have to shop at a grocery store. Since most items we purchase come in a variety of sizes, we might never know whether it’s a better value to buy the 28 ounce jar of peanut butter or the 40 ounce jar without the per unit price. We’ve been trained to believe that buying bigger is a better deal and in many cases it is, but as I learned on this day, not everything follows this pattern.
The management at the family entertainment center may have thought they were applying this principle when they discounted the cost of the 32 ounce drink, but they may have failed to see the effect of the refill. In the end, they’re not the ones losing money. I am. It is up to me to understand the principle of the per unit cost and to apply it—even when buying drinks for a rowdy bunch of third-graders.