Six Business Models That Count on Customers Being Lazy or Careless

Waste not, want not. A fool and his money are soon parted. A penny saved is a penny earned.

Remember those trusty proverbs from childhood, aimed at breaking us of our prodigal sensibilities, impulsive habits, and lack of foresight? Well-meaning and well-written as they were, they didn't stand much chance against an unappetizing plate of peas, the shiny, silver Hot Wheels Corvette near the checkout line, or a desire to stay dry against rescuing a rainstorm-soaked Teddy Ruxpin from the driveway.

Good thing, too, that life's little lessons fell on our non-listening ears -- at least as far as certain industries are concerned. A number of business models exist but only for our pooh-poohing of these golden rules. Find out which ones are taking our inherent tendency to waste their goods and services all the way to the bank.

Health Clubs

Like clockwork, come January 1, we take a hard look in the mirror and vow to shed the previous year's pounds. Topping our annual list of lofty resolutions is getting in shape, which often means joining a gym. And, like clockwork, we make it through just a few reggaeton moves before inevitably stepping out on Zumba class forever. Or at least until next New Year's Day.

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Gym membership is simply a sunk cost we eat, knowingly and begrudgingly. According to statistics reported by Club Manager Central, we spend an average of $55 per month to keep fit -- but since 67% of us are no-shows, we collectively use only $16 worth. With a limited amount of square-footage, equipment, and amenities, clubs are betting on our workout ennui. Otherwise they'd be forced to put a cap on enrollment, and when was the last time you heard of a gym turning away a prospective member for reaching capacity?

Unless we're talking about Bally Total Fitness (BLLY), which filled its contracts with hidden and misleading clauses about its cancellation and renewal practices -- even spurring a state investigation that led to a settlement and reform -- these health clubs aren't doing anything wrong. If you're looking for someone to blame for monthly payments for a service you don't use, take another hard look in that mirror.

Pharmaceuticals

There's some kind of flu bug going around right now and, apparently, it's pretty bad. The media says an epidemic-level of us are sick, leaving those who aren't clogging emergency rooms to rifle through our own medicine cabinets for relief. But if your home stash of Advil (PFE) and Robitussin is anything like mine, one look at the expiration date and it got tossed in the garbage like so many used tissues.

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As pricey as this stuff is, it seems like it should be manufactured to have a shelf-life beyond a can of tuna. Since it's probably not a great idea to use a higher-than-recommended dose or those that are beyond necessary, chances are you'll be stuck with leftovers that may not need to be reopened for another couple of years. At that point, it will be no good or, worse yet, unsafe to use.

Or will it? A Harvard Medical School article, referencing a study conducted by the Food and Drug Administration, suggests that the term "expiration date" is actually a misnomer. Ninety percent of the over-the-counter and prescription drugs tested were still effective -- up to 15 years past what the company stamped on the package. Instead, the date listed is a "full potency" indication after which point the medicine will slowly lose efficacy -- but over the span of more than a dozen years.

If only I'd learned this a week ago, before my two-year-new cold and flu remedies bit the dust bin.

Daily Deals

Kudos to Groupon (GRPN), Living Social, and Amazon Local (AMZN). These sites have absolutely revolutionized the paradoxical phenomenon of consumers clamoring for things they don't want -- and will ultimately never use. In fact, buyer's remorse via online couponing has become so widespread that a secondary marketplace has emerged where unused vouchers are bought and sold.

While it doesn't much matter to the daily deal sites themselves whether or not the credits are cashed in (since they've already taken their 50% cut), it certainly benefits the merchant to not have to make good on a heavily discounted, but prepaid, product or service. With only half of businesses turning a profit on their first daily deal promotion, they must rely on overages and repeat business to compensate for the loss.

That, or just bank on us continuing to sit on $500 million or so in unredeemed coupons.

Buffet Restaurants

In theory, an "all-you-can-eat" buffet for a low, fixed price sounds like a really bad business strategy. As it turns out, however, we don't actually eat that much -- or at least not enough of the good stuff.

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And that's not necessarily our fault. To begin with, buffet restaurants operate on a quantity over quality paradigm. Consider the offerings at a Biglari Holdings Inc. (BH) or Star Buffet Inc. (STRZQ) restaurant like Western Sizzlin' or Country Buffet. The fare at these establishments is often disproportionately starch-based with plenty of potatoes, bread, rice, and pasta on the menu, designed to quickly fill up patrons. Meat stations consist of cheap, frozen cuts that are often repurposed leftovers from the previous night's dinner service.

Add on lower labor costs with fewer cooks and servers, and you've got a recipe for profit.

Insurance

By definition, insurance is a risk management hedge against future damage or loss that promises compensation in the event of such damage or loss. The last thing the carrier of that policy wants to do is follow through on that promise. As such, the best customer is the one they hear from only twice a year -- via premium check.

Statistically speaking, the larger the pool of clients sharing the risk, the bigger the reserves (and potential profit) for insurance companies. Obamacare stands to further widen that margin. UnitedHealth Group's (UNH) net income, for example, has risen for three consecutive quarters -- the highest spike of 22.5% occurring in the third.

Deny 100 million claims (or 1 in 14) on an annual basis and the industry's financial prospects begin to look even healthier.

Credit Cards

My husband carefully monitors his finances, spends very conservatively, and faithfully pays off his credit card in full each month. He is a shining example of fiscal accountability in a debt-ridden nation and a complete freeloader as far as American Express (AXP) is concerned. If all of AMEX's customers behaved as responsibly as my husband, its credit card arm would be in serious trouble.

A gold star cardholder, on the other hand, is what the industry refers to as the revolver. This is the person who meets just the minimum monthly payment and leaves a nice, sizeable -- and interest-bearing -- balance. They may be a sizeable portion of the population, according to the National Bureau of Economic Research: In 2009, a NBER study discovered only 35% of those polled knew that making minimum payments equal to interest on outstanding debt would not eliminate their debt.

Late on a payment? Even better. The company just earned a bonus in fees, a newly raised interest rate and, most likely, an increased balance.

Credit card companies are profiting from late payments now more than ever. According to credit information company TransUnion, the national credit card delinquency rate (the ratio of borrowers 90 or more days past due) went up to 0.75% in the third-quarter of 2012 from 0.71% in the third-quarter of 2011. In contrast, the third quarter of 1994 showed 0.56% made late payments.

Don't bite off more than you can chew. That's another one we forgot.