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I am looking for the proper term for the effect in which a lower price solution leads to higher hidden costs. For example,

  • Batteries that are slightly cheaper than the leading brand, but have a significantly lower capacity.
  • Old laptops which cost less than new ones, but which then take significantly more time to do anything.
  • Incandescent lightbulbs that are cheaper to initially purchase than LED lightbulbs, but have a significantly shorter lifespan and a significantly higher running cost.
  • Paint which costs less to purchase than the leading brand, but requires more coats, so requires to more time and ultimately higher paint spend.
  • Old petrol cars which are cheaper to initially purchase than electric cars, but running them (fuel, maintenance, tax...) costs significantly more.

Sample sentence

Trying to save money by purchasing cheap shoes is a _ because they will wear out faster, forcing you to buy more.

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    The saying "Penny wise, pound foolish" springs to mind, but is hardly a "formal name." For what expressive purpose do you seek a "formal name" for this, though? Yes, I'm asking you to add the here standard sample sentence (with a blank for the missing term) to your question. Jan 28 at 12:15
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    From the moment you call it a "fallacy", you're saying you consider "buy cheap, buy twice" a mistaken belief. Is that so?
    – Centaurus
    Jan 28 at 13:05
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    I think the issue in the title is that the maxim "buy cheap, buy twice" speaks against the fallacy rather than is an example of it. You could just reorder your sentence a bit, maybe like "... a term for the fallacy described in the saying 'buy cheap, buy twice'" Jan 28 at 14:32
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    In Discworld fandom, the term is "Vimes boots".. Jan 28 at 15:51
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    @JohnLawler, "Vimes boots" has escaped from Discworld fandom. The next UK price index will be called the "Vimes boots index", after being changed to emphasise price changes in items that poor people buy. If a kilo of rice doubles in price, and a bottle of champagne increases by 5 percent, the "Vimes boots index" will grow faster than the original index. Important to adapt for example benefit payments correctly.
    – gnasher729
    Jan 30 at 13:47

9 Answers 9

77

The term is "false economy"1;

An apparent financial saving that in fact leads to greater expenditure.

The most popular false economies in Britain as of 20132 included,

  1. Just paying the minimum amount off your credit card each month
  2. Buying counterfeit goods
  3. Lying on your insurance application to get a cheaper premium
  4. Going abroad without travel insurance
  5. Not having your car serviced
  6. Buying cheap shoes
  7. Buying cheap paint
  8. Buying cheap loo roll
  9. Saving money by not having your boiler serviced
  10. Comparing only price, not quality
  11. Not having breakdown cover for your car
  12. Gym memberships
  13. Buying a cheap car
  14. Buying a cheap bra
  15. Mobile phone contracts
  16. Buying cheap moisturiser
  17. Shopping at £1 shops
  18. Doing-it-yourself rather than employing a tradesman
  19. Trying to avoid baggage charges on budget flights 
  20. Multi-buy or 3 for 2 offers

1Lexico Dictionaries | English. (n.d.). FALSE ECONOMY | Meaning & Definition for UK English | Lexico.com. [online] Available at: https://www.lexico.com/definition/false_economy [Accessed 28 Jan. 2022].

2Your Money. (2013). Revealed: the top 20 false economies. [online] Available at: https://www.yourmoney.com/credit-cards-loans/revealed-the-top-20-false-economies/ [Accessed 28 Jan. 2022].

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    I think this is a good question and answer (as do others, given the votes), but some of these are not necessarily false economies. Not having breakdown insurance, for example, is only a false economy if your car breaks down. It's a gamble: you might lose.
    – Andrew Leach
    Jan 28 at 10:25
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    @AndrewLeach As per source 2, the original research for that list was conducted by gocompare across Britain. The list does not necessarily reflect my personal opinion. Jan 28 at 13:13
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    @Mitch: But it's not uncommon, either; see economies of scale, airlines' economy class, or the verb economize. Jan 28 at 20:45
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    @SomeGuy if you're referring to #2, it's false economy because when you're found out you likely will get a penalty, which would be more than the premium you saved.
    – justhalf
    Jan 29 at 4:29
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    @AndrewLeach I'm assuming all of these are -EV. A "gamble" that's -EV can still work out on an individual level - but that does not make it a good decision before you know the outcome. Taking a 100$ bet on a coinflip, where if I win I get 101$ and if I lose I lose it all, is objectively a terrible decision, but I can still end up with 101$. Doesn't mean I did the right thing taking the bet if I find myself with 101$ at the end.
    – xLeitix
    Jan 31 at 10:57
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While not yet a formal name, I read an interesting article this week where, in the UK, campaigner Jack Monroe has introduced the "Vimes Boots Index". This was inspired by her criticism of the official government method used to calculate the Consumer Price Index (CPI) for tracking inflation.

She believed the CPI didn't accurately reflect the fact that inflation often hits poorer people harder than those that are well off.

As per an article in The Guardian:

The Vimes Boots Index is named in honour of Terry Pratchett’s creation Sam Vimes, who in the Discworld novel Men at Arms lays out the “Sam Vimes ‘Boots’ theory of socio-economic unfairness”.

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money,” wrote Pratchett. “Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of okay for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles. But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.”

The Pratchett estate has authorised the use of the name, tweeting its own Pratchett quote in support of Monroe’s campaign.

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    While I do support this answer (as well Jack Monroe's campaign), it's not really a fallacy. In the original novel the quote is taken from it's described as, "The Sam Vimes Theory of Socio-Economic Unfairness," because it stresses that the poorer person had no choice but the cheaper options, rather than deliberately selecting the less expensive version out of a mistaken belief of saving money in the long term. Jan 31 at 13:52
  • @GeoffAtkins: In my reading of the question, the motive of the cheaper purchase is not specified. And the reference to shoes in the example makes me think that the OP also had Pratchett in mind.
    – MSalters
    Jan 31 at 14:56
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    Seconding @GeoffAtkins's point. The original text of the question, before some edits, referenced a "fallacy," and OP James' self-answer suggests that they're thinking mainly of a situation in which the buyer has agency and choice, but makes a poor decision. The Vimes' Boots effect refracts the question along different lines: it's about not being permitted to make the "wise decision." Jan 31 at 19:34
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    @MSalters - as I pointed out, it's nothing to do with motive, but options. Vimes doesn't have the choice between "cheap boots" and "good boots". At that time he can only afford cheap boots. Sam knows that's more expensive in the long run. But he doesn't have any choice in the matter. Jan 31 at 23:54
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Another phrase for this is, Penny wise, pound foolish. (After the currency of the United Kingdom, but also used in countries whose currency is called the dollar.) I’m told some places also say, “Penny wise, dollar foolish.”

A related Americanism is nickel-and-dime. (This means paying or charging small amounts of money, so it can mean numerous small fees that add up, or buying the cheapest goods possible.) Over the past century of inflation, stores selling the cheapest knick-knacks went from being called “nickel stores” to “nickel-and-dime” or “five-and-dime” stores, to “dime store,” “two-bit” (twenty-five cents) as a synonym for cheap and shoddy, to “ninety-nine-cent store” and “dollar store,” and now perhaps “dollar-and-up” or “five below.”. Of those, “dime-store novel” is a genre, “five and dime” is remembered nostalgically if at all, but the others have hung on as synonyms for cheap and shoddy merchandise.

Another is, “Step over a dollar to pick up a dime.”

An example of “Penny wise, pound foolish” in use was when the executives of The Simpsons ordered him to write one clip show per season, to pad the show out with cheap episodes, writer Jon Vitti refused writing credit and wrote the episode he was ordered to under the pseudonym, “Penny Wise.” (The Writers’ Guild of America allows screenwriters to do this when their employer has forced them to write something they object to, under protest.) When the executives ordered another, “The Simpsons 138th Episode Spectacular,” Vitti and his co-writer David Silverman were credited under the pseudonyms “Penny Wise” and “Pound Foolish.” (Silverman was from New York City.)

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    +1. American English version: “Penny wise, dollar foolish”
    – Josh
    Jan 29 at 15:44
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    @Josh I can’t recall hearing that one. I have heard “nickel and dime” as a closely-related Americanism. The writer/director who used the pseudonym “Pound Foolish” as a rebuke of his bosses’ decision to do a clip show every season was American, born in New York.
    – Davislor
    Jan 29 at 18:23
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    Maybe it's a regionalism, or, maybe it's just something I picked up (I was raised in the Boston area) but I definitely have been saying "Penny wise dollar foolish" for most of my life. Or maybe it's just me, which is also entirely possible!
    – Josh
    Jan 29 at 18:25
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    As an American, I’ve heard “penny wise, pound foolish,” likely as a stock phrase that the speaker didn’t think much about and didn’t realize was necessarily referring to “pound” as currency, but never “penny wise, dollar foolish.” Sounds weird to me. Also, “nickel and dime” is not related—to “nickel and dime” someone is to charge them for each and every little thing, often suggesting that these things should have been included in the price already paid and that this is a form of bait and switch. It can cost you your reputation, so it might be “pound foolish,” but it doesn’t mean that
    – KRyan
    Jan 29 at 20:47
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    I understand "nickel and dime" as "a shop will (unexpectedly) charge you extra for every little bit added". It's not something the buyer does, but the seller.
    – gnasher729
    Jan 30 at 13:52
5

There's "shortsighted", to mean someone who doesn't look at long-term effects. There's also "short-term planning" or "short time horizon". More specific to spending is "Penny wise, pound foolish".

careful about small amounts of money but not about large amounts —used especially to describe something that is done to save a small amount of money now but that will cost a large amount of money in the future The plans to cut funding are penny-wise and pound-foolish.

https://www.merriam-webster.com/dictionary/penny-wise%20and%2Fbut%20pound-foolish

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"You get what you pay for" is only roughly the idea, and is only said by itself -- not as part of a sentence -- but makes up for it by being universally known. It means cheap stuff is often not very good, but not in any specific way. It might break faster, or not work as well, or not be as useful... . It implies you may have wasted your money.

It might be used: "these shoes I got on sale are falling apart -- I guess you get what you pay for" or "those rebuilt computers are pretty cheap", "yeah, but you get what you pay for -- the specs are terrible".

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    "You get what you pay for" doesn't imply false economy - I might be quite happy buying a £20 shirt that is worth £20 instead of a £100 shirt that is worth £100. It implies that I shouldn't / wouldn't complain that my shirt isn't as good as the £100 shirt. It's false economy if I pay £20 for a shirt worth £10 only.
    – gnasher729
    Jan 30 at 13:55
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    @gnasher729 Sure, but in the examples from the Q we also might be quite happy buying a $20 battery over a $100 one and not complain it dies faster. For 3 of them adding "but you get what you pay for" feels very natural. Maybe it's only an Americanism. Also, "false economy" seems misleading here, since that's not in the Q. Jan 30 at 16:54
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That could be seen as a simple fallacy or an urban legend.

This assertion is built on 3 disputable premisses:

  1. products are always marketed at their real value,
  2. quality is expensive ergo non-expensive can't be quality,
  3. "quality" implies durability.

If quality => high price is verified most of the time (although cheap labor can also produce quality work), nothing says that high price => quality. That would be if products were always marketed at their real value, but a common marketing strategy consists specifically in raising prices to build a perception of quality, which essentially is hacking the "buy cheap, buy twice" fallacy. Or raising prices artificially can even be used to create an exclusivity among consumers, which is the starting point of luxury goods.

In automotive and sport technical equipment (clothes, shoes, bike parts, hiking attire, etc.), ultralight products are usually the most expensive while also being less durable, which is a trade-off for weight savings. Quality is defined by ISO 9000 as the ability of the product to meet user's needs within user's budget, nothing is said about durability being a requirement. For example, any moving part put into motion by a motor consumes an energy proportional to its mass, so lightweight parts can reduce operating costs (mostly energy bills, but also bearings wear and shaft fatigue, meaning maintenance and replacement costs) while being less durable and more expensive at the same time.

So, the third premisses is plain wrong, the first and second can't be guaranteed, overall this assertion just sounds like a fallacy passing as dad's wisdom.

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All five possible answers can fit under one slogan: "A miser pays twice"

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    – Community Bot
    Jan 30 at 15:55
  • The slogan captures the idea nicely, but the OP was asking for a single word (or a few words) that might be dropped into a sentence like "Trying to save money by purchasing cheap shoes is a ___ because they will wear out faster, forcing you to buy more." Jan 31 at 12:50
  • I agree with Ben - this is not the formal term. Feb 4 at 15:08
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This idiom is not to rush decisions without a degree of surety. When making Boolean Yes/No decisions, the top-down question is essentially - Can the desired outcome be predicted adequately in order to proceed?

Similarly, the carpentry idiom 'Measure twice, cut once' has a similar meaning. Input data must be checked before execution, and a single erroneous measurement cannot be demonstrated as True or False without a check.

Measuring once is rapid, but leaves the outcome to the mercy of other variance (so-called 'luck') Measuring twice reduces the fallibility considerably. Buying 'cheap' means something is missing, defective or there are better options available

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  • I think you mean "Measure twice, cut once".
    – Rosie F
    Jan 31 at 10:56
  • I so absolutely did! HA HA HA! Clearly not following my own advice... "Write once, check never, explain afterwards by picking through the detritus of grammar errors and mistakes" Jan 31 at 11:04
-7

Cost-effective

effective or productive in relation to its cost.

Also see: cost-effectiveness analysis

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    It is specifically not cost effective. That's why some of the colloquialisms refer to the long term higher cost (penny wise, pound foolish).
    – siride
    Jan 29 at 14:37
  • @siride The OP doesn't seem to agree with that approach though. The title specifically calls it a fallacy, so a more general term might be appropriate here. After-all sometimes the cheap option is the right one.
    – Jontia
    Jan 31 at 11:18
  • @Jontia I don't think the OP is looking for the name of what you are describing (where being cheap up front is desirable). The OP specifically calls this a fallacy and presents several examples and wants a name for them. The fallacy here is that being cheap up front will be cheap in the long run, which is almost always not cost-effective. Something is cost-effective if it actually saves you money for the duration that you care about.
    – siride
    Jan 31 at 17:36

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