In most money matters, it pays to be fair. (Certainly when paying back your friends.) But when big businesses try to be fair to their customers, sometimes it can backfire in a big way.
Take J.C. Penney. Back in February, they hired a new CEO, Ron Johnson (who built Apple Inc.’s retail operation) to revamp their declining sales. The department store chain then made some radical changes to their pricing. They eliminated coupons, got rid of confusing fine print, and cut back from over 500 sales a year to just 12. The goal was to make shopping simpler, more transparent, and fairer for consumers.
Five months later, sales are tanking and stock prices have fallen more than 30%. But why? And is it possible for a company to be honest and still turn a profit? Continue reading When Fairness Backfires