Year: 2008

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Snap, Crackle, Poof: Kellogg’s Downsizes

Joining the ranks of products being downsized is an array of Kellogg’s cereals, including Apple Jacks, Corn Pops, Fruit Loops, Cocoa Krispies, and others.

Apple Jacks

*MOUSE PRINT: Though the boxes look identical head-on, the new box of Apple Jacks has two cups less of cereal.

How did they do it? The new boxes are narrower:

Apple Jacks side

The new version will also be 10 calories slimmer to your waist line. High fructose corn syrup was replaced with more apple juice concentrate (reducing sugar), and salt was also decreased.

Both boxes cost $3.49 during the week of July 6. That works out to 31.7 cents an ounce for the old larger box, and 40.1 cents an ounce for the new smaller one. That is a 26.4% price increase. Had the product been kept the same size, its new retail price would have climbed to $4.41.

Why did Kellogg’s downsize?  The company was refreshingly candid in their response:

“This package change is considered a price increase, in that box size is smaller. The reason for the price increase is the rising costs of ingredients and transportation. “

Consumers would clearly notice a price increase of almost a dollar, but the subtle change in packaging may go unnoticed. And even if shoppers did realize they were getting 2.3 ounces less in the box, they would not likely equate that with a nearly one dollar price hike.

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Sunshine Guaranteed: Or Your Trip is Free?

Sunshine guaranteePriceline is making an intriguing offer for travelers this summer — guaranteed sunshine!  “If your vacation is rained out, it’s free!”

Of course, the devil is in the details:

*MOUSE PRINT:

1. You must buy a vacation (hotel, airfare), not just airfare.

2. Sunshine is not guaranteed. If it is cloudy every day, no refund is due.

3. The big string is the amount of rain necessary to trigger a full refund: it must rain at least 1/2 inch for at least half the days of your trip. For a five day trip, it has to rain on three of the days. For an eight day trip, it has to rain on four of the days. Again, at least 1/2 inch of rain on EACH of the rainy days is required.

How likely is it that you will have so many days of heavy rain on your vacation?  Of course, it depends on the location you choose (only US destinations qualify). Checking to see how much actual rain different cities get per day, suggests you are unlikely to ever trigger a refund under Priceline’s guarantee. For example, in June 2008, in the Seattle area — a region known for being wet — there was more than a half inch of rain only on one day that month. [See chart]

In Ft. Lauderdale in June, it was quite rainy. But in a stretch of 10 days when it rained every day, only two non-consecutive days qualified. [See chart]

On the positive side, Priceline’s “no rain” guarantee is free. And your refund will be automatic if your trip meets the bad weather criteria it has set.

Bottomline: don’t count on a free trip.

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4% Interest Savings Account: Deal or No Deal?

A Massachusetts credit union is advertising what appears to be a great rate on savings accounts — 4% interest. On top of that, they promise rewards for every debit card purchase, and to reimburse you for other banks’ ATM fees.

Metro

How can this little credit union beat the big online banks?  The simple answer is they can’t.

*MOUSE PRINT:

Metro disclaimer

Only 0.25% interest on amounts over $3000? Thanks for nothing. If you make any sizeable deposit over $3000, your effective rate of interest will be far below the big online banks. (HSBC, for example, is paying 3.50% interest on up to $2,000,000 in deposits, until August 15.)

We won’t even get into the other fine print that requires that you also open a checking account, and only get back three cents per purchase as a reward.