Lord knows most people are not as financially literate as they should be. But that doesn’t mean we have to see financial illiteracy even when it doesn’t exist.
In Britain, the price-comparison website moneysupermarket.com hired people to stand on the sidewalk offering to give anyone who asked a free £5 note, with no obligations or restrictions. Out of 1,800 people, only 28 accepted the offer. What does this mean?
According to a press release:
“This exercise reveals a fundamental inertia which is stopping people from making sensible financial decisions,” said Tim Moss, head of loans and debt at moneysupermarket.com. “This was a completely genuine, no strings attached offer. People simply had to approach the sandwich board wearer and ask for a fiver. If more than 98 percent of the people who passed by couldn’t be bothered to do that, it raises some interesting questions about what needs to be done to persuade people to make an effort to improve their financial positions.
Would anyone else like to join me in calling B.S. on moneysupermarket.com?
Take a look at this picture of the guy who’s offering the money. His hand-lettered sandwich board says “If you ask me for a £5 note you can have one.” Does that really look like a “completely genuine, no strings attached offer?”
Aside from the fact that the gentlemen looks a bit — well, un-banker-like — this is not at all the equivalent of setting a stack of £5 notes on a table and giving them away. At the very least, you’re going to have to talk to this guy. And a reasonable expectation is that the conversation may cost you something, whether in time, annoyance, or perhaps worse.
Did the people who avoided this guy really exhibit a “fundamental inertia” or were they just smart enough to know that there’s no such thing as a free lunch — or free money?
(Aside: our resident quote bleggar Fred Shapiro, filling in for William Safire, let us know this weekend that Milton Friedman didn’t coin the “no free lunch” phrase.)
(Hat tip: Rich K.)
and 
. You can also watch it on 
I’d join you in calling BS, sure. It seems like this was more of a psychological experiment in trust than anything really financial-based. People are suspicious of anything that seems too good to be true because in most cases, they’d be right.
Oh, I agree with you completely. A reasonable expectation is that the costs are going to outweigh the 5 pounds. In fact, exit polls of those 28 people who did take the money would probably have shown utter surprise that nothing more was asked of them in return.
We may be subject to inertia causing us to forgo profitable opportunities, but this doesn’t look like evidence of that.
This has nothing to do with financial literacy. It has to do with trust. It’s an odd offer which few of us would trust to be genuine. Sure, the company knew its offer was genuine … but people encountering the sign, did not necessarily know that no strings were attached.
Since people who are both financially literate and financially illiterate might distrust the offer (even if for different reasons), this “study” did not isolate for “financially literate” behavior. Therefore it can tell us nothing about how many people are financially literate or not.
Absolutely B.S., especially in an Urban area such as the one shown in the picture. The cost to stop and talk with this individual may be more expensive than the 5 note they receive. I wonder what would happen if they increased that amount to 10 pounds and stood on the same street at the same time?
100% with you on this. Opportunity cost is too high. People are smart enough to know this is waste of their time (money).
While I agree with the trust issue, the thing that interests me more is why people don’t accept situations that legitimately do seem strings-free. Free money always seems to have strings attached, but other things given away on the street do not (ie marketing ploys).
Personally, I find that if something is of potential value to me (food, beverage, nifty tote bags) I often say no because I feel that I don’t need it as much as someone else might, or will at least limit the degree to which I help myself. When something is not of potential value to me (gum, key chains, coasters, bottle openers) I refuse because I feel that it’s a waste of resources and I don’t want to be one of the people who takes it with no intention of either using it or being swayed by the marketing ploy.
Even if the offer truly had no strings attached, the time I’d have to take to figure that out isn’t worth that kind of money. If it was $1000, then sure.
While I tend to agree with some of these comments all those screaming opportunity cost are probably the same people that will wait days to get a good to save $20 on a $200 item, this would be a few minutes of your time.