Cash for Clunkers? It's Not New

The success of the Cash for Clunkers program is not surprising, and the concept is really not new. It's what the restaurant business has been doing for years. It used to be you'd see an occasional restaurant offering reduced prices at happy hour, or a coupon for a reduction on your bill. Now you see it everywhere. Is this much different than cash for clunkers? Not really. The auto business has gone south, so let's give everyone an extra $2,500-$4,500 for their old clunker when they buy a new car. What they're really doing is giving the consumer a 20-30% discount on a $20,000 car. It's a great deal.

The restaurant industry is WAY ahead of the auto industry in giving discounts to get customers into their restaurants. Happy Hour, Early Bird, coupons and special fixe prix menus are what they've done. These specials can save the consumer anywhere from 10-50% on the price of a meal. Ten years ago I had two cards in my wallet that gave me a discount. The Coffee Bean, my favorite coffee house, used to give you a card that you had stamped every time you bought a drink, and after 10 stamps, you got one free drink, any drink. Also, my favorite yogurt store gave me a card which offered the same free yogurt after 10 stamps. Today I have dozens of cards from various restaurants, some offering a free appetizer, others offering as much as 25% off the total bill. Unfortuntately for the consumer, the Coffee Bean has been so successful that they no longer offer the buy 10 get one free promotion. They knew 35 years ago what it took the auto industry all this time to figure out.

If these big auto executives got out a little more, especially to average Joe kind of restaurants, they might have figured this out years ago. Give the consumer a bargain and they will come.