black friday 2020

Black Friday & the Hidden Costs of a Bargain

When you see a product on sale what’s the first thing that goes through your mind? Is it: Oooo what a bargain, I’d be losing money if I didn’t buy it? As an avid budgeter who loves saving money, this is a familiar thought. But the impulse to nab a good deal often conflicts with my environmental ideals! I know, so annoying right?! 

There are two things I care about in life: saving money and saving the environment. But often they don’t go hand-in-hand. 

As shoppers prepare for Black Friday sales at the end of the month, I think it’s a good time to consider the real cost of the goods we purchase. So let’s take a look at what lies behind that bargain price tag. 

Hidden costs 

Ok so, bear with me during the economics theory lesson, but markets work perfectly when all externalities (queue the economist and market nerds out there excitedly fanning themselves) are captured within the sales price of a product. What does that mean exactly?

It means the cost caused by the product is not incurred by the person who made it. For example if I ran a big furniture store that created cheap tables that broke after 6 months and let’s say most of the broken tables get thrown on the street because consumers don’t want to pay to take them to the garbage tip. Therefore the local government and wider society has to pay for the clean-up of someone else’s problem. If the furniture store was responsible for the disposal of the table (aka an externality) they might design that table to last longer or factor in the disposal costs and charge more for it. 

Currently, some really significant costs aren’t included in the price of the products we buy. We don’t include the climate change impact, human rights abuses, or disposal costs. That’s why during the Black Friday sales you might find a synthetic Christmas tree jumper with built-in flashing lights for under €10. That’s pretty cheap but doesn’t include it’s true costs which would make it significantly more expensive. Let’s break it down! 

Climate change costs

To make that jumper we need a whole host of environmental resources: the raw materials, the energy during the manufacturing process and the fuel to transport it across the globe. All of these activities emit greenhouse gases that contribute to climate change. If you consider that climate change could cost Germany 800 billion euros by 2050, we should probably start saving. Someone will need to pay for the climate adaptation measures, like the cost of upgrading infrastructure to manage higher rates of rainfall from the more frequent storms, and I’m guessing it’s not the person in the flashing Christmas jumper. More likely it is from your taxes. 

Black friday deals

Obviously one jumper isn’t causing 800 billion euros worth of damage alone but the producers aren’t factoring in the cost of climate change meaning everyone else is going to need to pay later. So while the store may not factor in the cost of rising sea levels in coastal towns when you are checking out your basket online, maybe just double check if you really need this?

Human costs 

You made it through climate change costs, strap yourself in to learn about the human costs. 

Over time I’ve actually changed how I think about a bargain, when a friend tells me proudly about the cheap new pair of jeans they purchased, I joke “tiny hands made that” (yes surprisingly I still have friends!) Also when I say a joke, I mean that it is very possibly true. There is in estimated 170 million children engaged in child labour around the world. A lot of companies don’t actually understand their supply chains well enough to claim they don’t have any. 

In addition to child labor, there are millions of workers across the globe who aren’t paid a living wage or are working in unsafe conditions. I have a friend who procured goods for a large international company, who told me about seeing workers in one Chinese factory wearing thongs/flip-flops (aka essentially hausschuhe) while pouring molten hot liquid iron to create cast iron pans. Wow those Black Friday kitchen sales just got a bit bleak!   

Unfortunately the cost of people’s time, their childhood and their health and safety aren’t being fully factored into the price of many of the goods we buy. Our ignorance means we are allowing workers in other countries to take a pay cut so we can have cheap products! 

Waste and Disposal

Finally, let’s talk about waste as an externality. When we throw something out, who is stuck with the end of life clean-up for our products? A Christmas tree jumper – how would one even go about recycling it? To be honest I’m a sustainability expert and I’m stressed at the idea of trying to recycle it. Firstly, you would have to take the batteries out and take them to a battery drop off point. Secondly, you would have to detach the lighting system and you could potentially recycle some of the plastic. If you bought it at a brick and mortar store maybe they accept old clothing and recycle it. The jumper likely has so much plastic in it that you couldn’t compost it or even use it for rags. So I guess we put that in the bin?

BFCM deals
Black friday offers

So everyone else is paying for the clean up of a jumper that someone else created. They didn’t have to think about how easy it is to recycle when they make it because the cost of managing waste comes from elsewhere. 

Dammit those costs keep stacking up!!!

What can I do?

Ok sooooo the system is a little bit imperfect due to those pesky externalities. I bet you’re thinking, ‘But what can I do about the system?’ I can’t fix it so what’s the point in trying? May as well lean into the depression and buy a bunch of stuff online to make myself feel better? Well actually you can make an impact – with how you choose to spend your money, or not spend it. That’s how you change the system, small steps! 

There are companies out there working to solve human rights issues in their supply chain, fighting climate change and thoughtfully considering what happens with their product at the end-of-life. The more people invest in these business models instead of the lowest cost unsustainable sales item, the more we will see companies changing their business models and working with customers to find sustainable solutions. 

black friday goods

We as individuals also drive change when we buy less and learn to appreciate the items we do buy. You could start by trying the Buy Nothing New challenge (read about it here) and challenge your mindset when it comes to buying something new. When your mouse is hovering over the checkout basket remember that impulse buying might release dopamine in the short term but our decisions do impact people out there down the supply chain or the planet. 

So maybe don’t buy that Black Friday bargain Christmas jumper with flashing lights. Instead buy a jumper from an ethical brand, get the one your grandma knitted you out of the cupboard or just wear your regular clothes!! Change will happen. Slowly but surely, so don’t lose hope small steps add up to make an impact!

Author

  • Sarah Eager is a strategy consultant and sustainability communicator who lives and works in Berlin. She works with individuals, artists, start-ups and companies to develop business strategies and project manage implementation. Check out her consulting services at Eager + Co. Sarah also is a writer and workshop facilitator who creates engaging written content and tailor-made workshops which communicate complex subjects in an accessible and fun way. For practical day-to-day sustainability, tips follow her Instagram @TheGuiltyEnvironmentalist: https://www.instagram.com/the_guilty_environmentalist/