Is it Worth Your Time? — Chatime’s 50% Go-Pay Cashback Deal
Know your time’s worth, young kings and queens.
You know how it goes. It’s month-end. You just got your paycheck. It’s 4 PM. It’s snack time.
You go to everyone’s go-to bubble tea stall. Lo and behold, there’s a crazy queue. You estimate it’s gonna take more than 15 minutes. You wonder if it’s worth the effort. You wonder if it’s worth your time.
That’s actually what happened to me.
I went down from the office because I wanted some chatime. I didn’t know about the GoPay’s PAY DAY 50% cash back deal. I went down expecting the 40% cash back deal. I hate queuing, but the last time I went and bought it on 40% cash back, it was not that bad, I can stand for 5 minutes alright.
But I found that the deal of the day was 50% cash back only for 27th to 28th of September, and the queue was absolutely bonkers. I didn’t know better but I went on the queue and started my stopwatch. Just because I was curious, how long are people (and I) willing to wait for some 50% cash back with a maximum of IDR 30,000?
Turns out I queued for a friggin 23 minutes and 42 seconds.
It’s bonkers to think what an additional 10% cash back, which, assuming an average large cup costs IDR 30,000 is worth IDR 3,000 could do to us all pesky middle class workers.
I only happen to buy a large sized Honey Lemon Aloe drink, which is worth IDR 30,000, nets me a GoPay cash back of IDR 15,000. Makes me wonder if IDR 15,000 is worth my 23 minutes and 42 seconds.
It wasn’t only Chatime, though. I also saw people queuing like crazy for Sour Sally, for the same cash back promo. Nevertheless, there are several points that I’d like to make a point of asking here:
- Why do people willingly queue for an absurd 20 minutes for some bubble tea? Why the hell did I?
- Why does the queue increase dramatically in when the Cash Back was 50%, compared to when it was 40%?
- Do we buy stuff we otherwise wouldn’t buy just because there is a discount?
- Is it really worth your time queuing as long as I did?
Now, onto the first two questions.
To understand why we queue as long as we (I) did, we have to first understand what constitutes a discount, or a promo.
Obviously, a discount or a promo is one tactic employed by merchants by cutting back on their margin (either by outright cutting the price or offering a combo deal for a somewhat reduced combined price). This tactic has been tried and proven since as old as 1887. The goal of doing so could range from:
- Boost amount of sales by enticing customers by ‘lower price’.
- Converting potential customers by reducing the barrier of entry (the price)
In short, to gain more sales and increase popularity.
This works so well since as humans we are hard wired to seek pleasure and avoid pain. The pleasure is obviously the joy we get for getting something for a price lower than what we usually perceive. The pain? It’s the fear of missing out on such a good deal. This is what we call FOMO (Fear of Missing Out).
Discounts also usually come with a certain time limit.
In the case of Chatime. I’m usually a pretty stingy person by my office’s standard. The only reason I went down that day was only because I thought there was a 40% cash back. Which turns out to be 50%, with bonkers line. The 40% cash back promo lasts for the whole month of September. While the 50% eloquently dubbed PAY DAY Cash Back Promo only lasts from 27th to 28th of September. A measly 2 days.
This creates a sense of urgency for consumers. I bet you this line is quite familiar:
“C’mon the deal only last two days we gotta go now!”
When the cash back was 40%, the time limit was 1 month. 1 month is quite the long time. We can easily think “eh I’ll buy that tomorrow”. This may increase store traffic, but negligent compared to when the time limit is only 2 days.
When you change the time limit into only two days, the thinking process became “Oh no only two days left, I gotta jump in or risk losing out on this promo!”. We become afraid of ‘losing’ on the deal. Not leveraging the deal become a ‘potential loss’ event. More economically literate readers might cite there is an opportunity cost of not leveraging the deal.
And more often than not, on the fear of missing out, we ended up spending up more. We might have fetched a ‘good deal’ by purchasing something at a lower price. But stepping back, we might also have spent money on something we otherwise wouldn’t spend when there is no promo.
Speaking of buying stuff we wouldn’t buy otherwise. I like to liken this to the decision to register for a credit card.
I have been working for a year, but I don’t have a credit card yet. My friends and colleagues have been encouraging me to make one but I just couldn’t find a good enough reason to. This culminates at one moment when I hung out with my juniors in university, asking me if I already have my own credit card or not. Not having one, I just told her I can’t find a good enough reason to. The most common reason they cite is “credit card has got a lot of good promos, discounts, and rewards!”.
But am i going to use those promos and discounts over the normal course of my life, or will I just be buying stuff I don’t really need under the illusion of saving?
When used correctly, and wisely, a credit card is a very powerful tool. It eliminates the need to carry cash, and indeed it gives several benefits and promos which may end up saving you some money. The problem lies within ‘using the credit card wisely’.
Credit cards facilitates us to do transactions we wouldn’t be able to otherwise. We won’t always carry cash, and when travelling abroad a credit card is indeed a very powerful tool enabling you to avoid exchanging swaths of foreign currency. Credit cards makes it easy to do transactions. Which precisely where the danger lies.
I’m going to simulate a few scenarios:
- When buying stuff with cash, most of us don’t carry large amount of cash daily. Let’s say you are carrying IDR 300,000. You see a very cute purse costing IDR 250,000. You contemplate for a moment and simulate scenarios in which you have to survive the day with IDR 50,000 left.
You may or may not purchase the purse.
- Next, suppose you carry IDR 300,000. You see a very cute dress costing IDR 500,000. But wait! You have a debit card you can use! You roughly remember your balance of about IDR 3,000,000. And checkout.
It gets easier right?
- Next, you carry IDR 300,000 and the dress costs IDR 500,000, but this time you have a credit card with a limit of IDR 6,000,000 (with BCA, you can get 6 mio limit with 3 mio income). And yeah, checkout.
Credit cards lacks the physicality of actually forking over actual money. Making the process of purchasing using credit cards less painful than when you are using cash. The easier it is for us to spend money, the more likely we are to overspend.
I haven’t even touched the case where there are credit card exclusive discounts or promo. In which case, it’s a no brainer. Paying IDR 1,000,000 for a purse in cash versus paying IDR 850,000 with credit card.
We tend to jump to the question ‘which way is more economically advantageous?’ we forgot to ask ourselves ‘do I really need to buy this?’ which I believe is the question we need to ask ourselves more often.
Sure, the more savvy credit card users may have calculated the possible costs and benefits of credit cards and has navigated through all the possible promos to come out on top. But how many of us are actually that savvy? Because we tend to overestimate ourselves, including on the matter of saving money. We’d like to think we are smarter than that, and will be able to control our urges to avoid being knee-deep in debt. But I really do wonder how many of us have achieved that stage of financial literacy.
Onto the more pressing question. Is it really worth your time queuing as long as I did?
To answer this, we have to assign a monetary value to our time.
I decided to use overtime rate as monetary worth of our time. For this case, the overtime rate of an entry level external auditor to simulate my case.
I queued 23 minutes to get a IDR 15,000 worth of GoPay cash back. To be worth it, my overtime rate has to be lower than that. People may argue that the time we spend queuing is usually our free time, which does not generate money, and thus is not a good monetary value to be assigned to time spent queuing. But I may argue back we all use time value of money all the time, even though you won’t be always investing your money at the same rate the discount rate you assigned. So keep in mind that this is just a theory.
I also can’t use the hourly rate a Big 4 firm charges to its clients because that’s not the money we actually we make isn’t it. It’s the money the firm makes using you.
So first we already have we received IDR 15,000 for queuing for 23 minutes. The next step would be how much would I gain if I worked overtime for the same amount of time?
I’m going to assume you are all not yet familiar with overtime calculation. First you need to multiply you hourly rate dividing your base salary by 173. Then you multiply that by 1.5 for the first hour of your overtime (it multiplies by 2 for the rest of the overtime).
Theeen for the purpose of our pursuit of knowledge, you multiply them by the time you wasted queuing (that’s 23 minutes/60 minutes).
Oh by the way, the IDR 6,000,000 is just a rough estimate not meant to represent any particular accounting firm.
One might argue that to make it worth it the queue, one has to buy at least two cups to attain a bigger cashback. But that would mean you are spending more than you actually need, and ended up spending more than you would’ve initially.
Another possible argument would be…by queuing for 23 minutes, you delay your work by the same amount of time. Which in turn, assuming you have to work for a full 8 hours, you push back your go-home time by the same amount of time to work to make up for the time you spent queuing. So you get both cash back and overtime pay. But that’s not the point I’m trying to make here. You can’t really charge overtime like that since you’d need manager’s approval and all. And I’d wager they won’t be too happy seeing you charging overtime when he/she knows you’ve been queuing all day.
There is also another way to calculate the monetary value of your time. The first time we calculated it using overtime rate because the consultants themselves don’t get paid on hourly basis unless if they are doing overtime (some even don’t get paid for overtime). This time, we are going to use the formula for calculating factory laborers wage.
The difference in this method is to get the hourly rate, we simply divide the base salary by the number of days worked. But again, according to some government regulations, for laborers working 5 days a week (8 hrs a day), the monthly wage is to be divided by 25. For laborers working 6 days a week (7 hrs a day), the monthly wage is to be divided by 30. I might be wrong about this but I’m too lazy to lookup further.
We are going to assume the rate using the 5 days a week rate assuming 25 working days. Then the hourly rate will again be multiplied by the time you wasted queuing (that’s 23 minutes/60 minutes).
So is it worth it? In a very consultant fashion, I’d say, it depends.
Just, the next time you had to choose to queue or not for a promo, remember what your time is worth.
[Do you have a better method to assign monetary value to our time? If you do, please share with us all!]
