It is hard to do business. However, you can make life easier for you when you make fraud part of your business. You probably still cannot be as successful as the CEO of Goldman Sachs, but you can earn more money than a first year employee in Goldman. Sounds sweet? This blog will show you how.
Background
There has never been a more favorable environment for fraud. The legal breakthrough came after the landmark supreme court case of Ben Edelman vs. Ran Duan, which established as the supreme legal principle that in US, businesses operate under the court of public opinion, not rule of law. It is a huge triumph for us potential defrauders. Hurray.
Principles of Successful Fraud
1. Make it small
There is good economics behind it. When you defraud a small amount, you can count on being successful: 1)It is unlikely that your prey will notice it. 2)Even if he notices, he will correctly understand that it is not worth it to fight such a small amount. 3)Even if he is crazy and decides to fight it, the court of public opinion will deem him to be a cheapo and rule in your favor. This is bullet-proof.
2. Combine it with a small business
The key insight is that under the new legal paradigm, we operate with the court of public opinion, which is sympathetic towards small businesses. With a mom-and-pop fraud business, you have higher chance of success.
3. Target High-end consumers
This might sound weird, but it is full of wisdom. When you defraud a high-end customer, who should "have better things to do", it is less likely he would care. Even if he cares, remember, you are more likely to win, because think about it, how awful it sounds: a rich jerk (the court will impose that name for you) fight a small mom-and-pom fraud business for a small amount. Now you recognize that our three principles work all together right?
FAQ
1. Would I make enough money from your scheme?
Absolutely. You need to realize that you make a kill from volume. The most successful fraud is never a grand one, it is "death by a thousand cuts". If you make it big, you will be transported to the normal court. Stay with the court of public opinion, it is your safe-harbour. I would like to perform the following calculation. Each time your defraud 4 dollars. Even in a small town of population around 6000, you can get about 100 people per day (see link). That adds up to 12K a month and 144K a year. Very decent money! That is more than a business school professor makes after spending so many years working harder than a slave as a graduate student, then as assistant professor.
2. How should I respond when my customer fight back?
This should be extremely rare. If one customer fight back, do offer to compensate him the amount over-charged, but nothing more. Be courteous (as this might be used as evidence in court). He will back off. Since this will be rare, it will not affect your profitability. Remember, your target is high-end customers, who are much less likely to fight back. If he demands more, turn it to the court of public opinion, like Boston.com.
3. Can you give some specific examples?
I would love to. Our most successful case involves a restaurant whose online menu shows lower price than actually charged. After customers look at price and put effort into choosing the food, they would find it too costly to leave for another restaurant and remake the food decision. The case protagonist ingeniously posted "all prices subject to changes" and get immune from any legal charges, at least in the court of public opinion. Indeed the case was such a blast, that you can see more and more businesses are adopting similar tactics with huge success. In fact, I would like to point out that there is no reason to limit this to online menu. I advise you do the same with physical menu. After all, changing physical menu is more costly---you need to reprint the menu (so called menu cost). Just do add the line on your physical menu "All prices subject to change".
Conclusion
As I noted, there has never been a better than to build a business around fraud. You can do it and achieve your American Dream! But do remember the clock is tickling, and you should make your fortune before the public opinion swings. May the odds ever be in your favor.
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