Archive for the ‘Consumer tips’ Category

Lottery operators still looking for last year’s winners

Thursday, May 30th, 2013

Where am I? Lottery booths in Tokyo

Where am I? Lottery booths in Tokyo

According to the Mainichi Shimbun, as of May 13, the holders of seven winning ¥100 million lottery tickets that were sold last year for the Dream Jumbo Takarakuji have yet to claim their prizes, and if they don’t claim them by June 17 the tickets will become void. The media is cooperating by actually printing the names of the locations where the seven tickets were purchased in an effort to jog the memories of people who may have bought them but for reasons unknown have forgotten all about it. Being a responsible social medium, we here reprint these locations in the unlikely event that one or more of our readers happens to belong to this select group: The Koriyama branch of Mizuho Bank in Fukushima Prefecture; the TFC Kita Asaka TK Shop in Saitama City; the Nishi Ginza Chance Center and the Yotsuya Dream Center in Tokyo; the Hiratsuka branch of Mizuho Bank and the Yokohama Porta Chance Center in Kanagawa Prefecture; and the Tenmonkan Chance Center in Kagoshima Prefecture. To check the details and the winning numbers (in Japanese only), go here. The site also includes information about unclaimed prizes from more recent lotteries.

This is not, apparently, an unusual development. Since 2009, ¥20.1 billion worth of winning lottery tickets have become void because their holders did not redeem them by the deadline, which is one calendar year after the winning numbers are selected by computer. Included in this loot are 25 tickets that were worth at least ¥100 million. Since Takarakuji lotteries do not carry over, the money becomes the property of whichever local government presides over the place where the winning ticket was sold, so it’s not as if the money becames a complete waste. The free media publicity may have another purpose. Sales of Takarakuji have been dropping steadily for the last few years and the operators want to keep awareness of the lottery alive. In fact, the failure of some lottery buyers to check their tickets for winning numbers could be considered a symptom of the game’s loss of cultural topicality. As with the squirrel that works hard to hoard nuts for the winter and then forgets where it hid them, all the excitement is in the acquisition.

As land lines go the way of the dodo, what is a subscription right worth?

Monday, May 13th, 2013

Anyone who still owns, much less uses, a fax machine may be embarrassed by the fact. The rest of the developed world has abandoned the device, and it seems that only in Japan is its utility valued, if for no other reason that to send maps to people who still don’t know their way around Google. And the same march of technology that has rendered the fax obsolete is making land lines an unnecessary expense. Most young people who acquire their first apartments don’t bother applying for them. Their mobile phones are perfectly adequate.

What the hell is that?

What the hell is that?

So what about those of us who still have land lines? More specifically, is the kanyuken — the subscription right to the line — worth anything? Once upon a time it cost as much as ¥80,000 to have a telephone line set up in one’s name. That was the cost of the right to a subscription, a kind of investment in the country’s telecommunications infrastructure, and you carried it with you your whole life; unless you wanted to sell it, which you could do. In fact, there was a market, with agents willing to broker your kanyuken to others. Though no one ever made money off their subscription rights, some people used it as security for small loans or pawned them.

Japan started offering telephone service in 1890, but the kanyuken system didn’t begin until 1897, when it cost ¥15. However, households didn’t really start getting telephones on a major scale until after the war, and it wasn’t until the late 1960s that more than half of the country’s population had phones in their homes. Many, in fact, were party lines. By 1976, the kanyuken cost more than ¥75,000, and subscribers could pay in installments. The telephones themselves were rented not owned. NTT was privatized in 1985, at which point the price of a subscription right dropped to ¥72,000, not including tax. It’s been slowly decreasing ever since. Since 2005 it has cost ¥36,000, though you can buy it on the market for as little as ¥11,000. NTT does not and never has bought back such rights, so once you purchase it it’s yours forever unless you unload it on someone down the line, and that’s becoming increasingly difficult. Few businesses now trade in kanyuken, though we did find one on the Internet that was offering ¥1,500 for a subscription right.

Consequently, some people forget that they have kanyuken. They move house and instead of having the land line in their new abode turned on, they just use their cell. In such situations, however, you still have to tell your local NTT office that you want to keep the right to a land line. After you do that they will send you a riyo kyushi no shirase (notice to stop usage), which allows you to maintain your subscription right, but only for 10 years. If you don’t re-remind the phone company that you want to keep the right, then after 10 years it expires and the shisetsu setchi futankin (money to facilitate operations) becomes invalid. Of course, during that time if you decide to reactivate your land line then the right is automatically preserved. In fact, the phone company recommends on the notice that you contact them every five years to confirm your subscription right. You never know. Faxes may make a comeback.

Anticipation: How high will mortgage interest go?

Tuesday, May 7th, 2013

Of course, you can always pay cash

Of course, you can always pay cash

Just as deposit interest rates have remained near zero for the past 20 years in Japan, housing mortgage interest rates have been lower here than almost anywhere else in the world. The effect of the latter has been almost counter-intuitive. Low interest usually spurs investment in real estate and home sales but Japan’s economic situation, not to mention its housing environment, is so odd to begin with that this hasn’t proved to be the case. Younger people thinking about buying homes have lived with low interest rates for so long that they think it’s the norm.

Last week interest rates for housing loans increased by 0.05 percent, the first rise in three months. Interest rates for loans are based on 10-year-bond interest rates. The Bank of Japan, on behalf of the prime minister, is gunning for a two percent inflation rate, and in order to achieve that goal it announced plans to buy government bonds from banks. Anticipating the BOJ’s move, investors have started to sell their bonds. When the price of bonds goes down the interest they pay goes up. More people sold bonds than the BOJ projected, which may not make the government happy since in the long run it will have to pay that interest to bondholders. If consumer prices and, in turn, salaries go up, that won’t be a problem since the government can collect more taxes as a result, but if inflation doesn’t kick in then it just means even more government debt.

Consumers are more concerned with how the change in interest rates will affect them directly. A recent article in Aera profiled a working couple in their 30s who have decided to buy a condominium in Tokyo right away in anticipation of the consumption tax rise next year. Because they both want to be near their workplaces, they settled on an area where the price of a condo that fits their lifestyle is about ¥50 million. They only have ¥3 million for a down payment, and they chose a variable interest rate because it’s lower than a fixed rate right now. Aera asked a financial planner about their situation and the planner seemed dubious.

Continue reading rising interest rate →

Bargain sales aren’t always what they appear to be

Wednesday, May 1st, 2013

Half price today or twice as much tomorrow?

Half price today or twice as much tomorrow?

On April 25 the Consumer Affairs Agency sent notices (pdf) to 12 nationwide retailers regarding sales of frozen foods. The CAA thinks that the way these sales are advertised purposely misleads shoppers and thus violates the Price Indication Law. The cited stores, which include supermarkets, drug stores and discount chains not named in the media, have regular bargain sales on frozen foods at savings of 30 to 50 percent off “the manufacturers’ suggested retail prices,” but as the CAA points out there is no such thing as a price suggested by the manufacturer when it comes to food. In essence, the stores are “fabricating” discounts.

Frozen food bargain sales have been commonplace for more than decade. In fact, every supermarket and discount drug store has them. They take place on a weekly basis, usually Tuesdays or Wednesdays, and regular patrons thus come to expect them, which means they rarely buy frozen food the rest of the week.

What the CAA is pointing out is that these retailers have convinced shoppers that on those days when frozen foods are “half-price” or “one-third-price” they are cheaper than they “normally” are, but what is normal in this case? The CAA only seems to have cited retailers who use the phrase “suggested manufacturers’ retail price” (kibo kagaku or kori kagaku) in their ads, but even those stores that don’t use the phrase are being cagey with the semantics: Half of what price?

According to the business magazine Toyo Keizai, wholesale prices for merchandise sold in supermarkets and discount drug stores are determined through negotiations between individual retailers and their suppliers, and no retail reference prices are mentioned, must less “suggested,” by the respective manufacturers. Traditionally, bargain sales are carried out to clear excess inventory, but that’s not the case here.

For all intents and purposes the ostensible “sale” prices are the standard ones, since the bulk of a store’s frozen foods are sold on those specified sale days. It’s the other days, when the products cost twice as much, that are the exception. The reason this strategy is applied to frozen food is because consumers are more willing to buy frozen food in bulk since they can be kept for long periods of time in the freezer. So on sale days, shoppers buy more frozen food than they would if there were no bargain sales; it’s just that they do it only once a week.

Uniqlo has applied this same strategy to clothing. Last year the chain expanded its weekly bargain sales from two days to four. Previously, the weekly sales took place on Saturday and Sunday, but now sale periods also include Fridays and Mondays, which means there is a “bargain sale” four days a week. But if you look at the matter a different way, you could simply say that on those four days Uniqlo is selling merchandise at their normal price and on the other days it is selling it at “premium prices.” It’s all in the terminology, and the thinking.

Service contracts and the ‘mendokusai’ factor

Tuesday, April 23rd, 2013

"E" as in "exasperating"

“E” as in “exasperating”

Last week we received a monthly credit card statement that included the first payment for our emobile portable Wi-Fi service, which we signed up for at the end of February. The charge came to ¥4,642, which was higher than we expected. We had applied at a discount electronics store near our home. From the beginning we understood that the service costs ¥3,880 a month, and while that did not provide us with unlimited Wi-Fi access, the amount of access it did provide was more than enough for our needs.

We made this clear to the saleperson right from the beginning because there were other plans available at higher prices and we didn’t want to inadvertently sign up for one of those. He understood, but had to make his pitches.

The first had to do with the Wi-Fi device itself, which cost ¥33,600. Since the basic contract was for two years, that came to ¥1,400 a month, but because we were signing a two-year contract, the price of the device is waived, which means ¥1,400 would be deducted from the standard monthly fee. That doesn’t mean ¥1,400 is subtracted from the ¥3,880 emobile advertised as the basic monthly service fee. Apparently, ¥3,880 is the fee after the seemingly non-existent ¥1,400 device charge is subtracted.

If you break the contract before the two years are up or change to a different service/device, you have to pay a fee of ¥9,975. And if you don’t inform them that you don’t want to renew your contract at the end of two years, the company automatically renews it. This term has bothered a number of other subscribers, especially since there is only a one-month window at the end of a contract during which you can request that it not be renewed.

The second pitch had to do with options, none of which we took. One was insurance for both the device and the software, which costs ¥525 a month. The salesman didn’t try to push it, but he made a point of explaining that if we didn’t want it we had to “waive” it, meaning we had to actively decline the insurance. It wasn’t a matter of not taking it.

From our understanding, the insurance fee was automatically added to the service fee, which hardly made it an “option.” He said we would have to call the emobile customer support number to formally cancel it — for some reason we couldn’t do it through him — and that we should do it as soon as our Wi-Fi service went into effect, since we would be charged for the insurance almost as soon as we started using the device.

Continue reading about portable Wi-Fi contracts →

Auto sales driven by gas mileage

Thursday, March 21st, 2013

Fit to be drived

Fit to be drived

Last week Prime Minister Shinzo Abe announced that Japan would participate in the Trans-Pacific Partnership (TPP) talks, a prospect that worries American car makers since the trade agreement could remove any remaining tariffs from Japanese cars sold in the U.S., thus making them cheaper and even more attractive to American consumers. Apparently, carmakers in the U.S. don’t think the agreement will sufficiently remove what they deem barriers to American car sales in Japan. The fact that these barriers, which include, in the words of Reuters, “discriminatory taxes, onerous and costly certification procedures for foreign cars and [an] unwillingness by Japanese auto dealers to sell foreign cars,” have not prevented certain European automakers from doing well in Japan may, in fact, indicate that the problem is American products rather than Japanese protectionism. For instance, the U.S. claims that Japan’s preferential tax treatment for kei (light) cars — smaller automobiles whose engine displacement is 660cc — is a trade barrier, but since America doesn’t make kei cars it’s difficult to understand what it’s a barrier to. Kei cars account for about 30 percent of the Japanese car market, which means people like them, and the main reason they like them is their superior gas mileage.

It’s also the main reason for the popularity of hybrids. On March 3, the land ministry announced its most recent findings for the best gas mileage among cars sold in Japan. Toyota’s hybrid Aqua came out in first place with 35.4 km per liter (in JC08 mode). In second place was the first hybrid car sold in Japan, Toyota’s Prius with 32.6km/l. In third place was Toyota’s high-end hybrid Lexus at 30.4km/l, and fourth was Honda’s hybrid Insight. The highest non-hybrid on the list was the Mitsubishi Mirage, which gets 27.2km/l.

Aqua is also the best-selling model in Japan right now. In February, 24,526 Aquas were sold nationwide, with Prius in second place with 23,473. After that, it was Nissan’s Note with 16,497 followed by Honda’s Fit. However, overall kei cars still outsell regular cars and hybrids in terms of units, probably because in addition to good gas mileage they cost less to purchase. Suzuki’s Alto and Mazda’s Carol tied for first among kei cars in terms of fuel efficiency with 30.2km/l. American carmakers will probably not be happy to learn that the government has required all cars sold in Japan to meet stricter efficiency standards by 2015 in accordance with the revised Energy Conservation Law. As it stands, however, a fair number of domestic models already meet these standards.

Of course, the gas mileage figures offered by the government and the automakers themselves should be used purely for comparative purposes. One would probably have to drive straight on an expressway on perfectly balanced tires going downhill with the wind at one’s back to achieve 35km/l in an Aqua, but last week we decided to try one out for a day trip to Gunma. We picked up the car in Iwatsuki, Saitama Prefecture, at a branch of Toyota Rental & Leasing. The fee was ¥7,000 for the day, including the use of a car navigation system, plus ¥1,000 for insurance.

We drove about 250 km and ended up spending ¥1,372 for gasoline, which worked out to about 9 liters or a little less than 25km/l. That’s much less than the advertised rate, but better than we expected considering that more than a third of the drive was spent on surface roads rather than expressways. But we didn’t use the air conditioner, either. And when we checked several websites dedicated to jissai nenpi, or fuel efficiency under real driving conditions, the average gas mileage for the Aqua is around 21.5km/l.

For comparison’s sake, in January we rented Nissan’s compact (but not kei) March from Nikoniko rentals for ¥4,000 a day with insurance included but no car navigation system. We drove 140 km, none on expressways, and ended up using 8.37 liters, which means gas mileage was 17.9km/l (advertised: 24; real: 20). The advantage of the hybrid is obvious, and will likely become more so when Honda comes out with a new version of its hybrid Fit in August. The company is already boasting that gas mileage will exceed 36, thus topping Aqua. And it will be cheaper, too.

Energy conservation isn’t just for summers any more

Wednesday, January 9th, 2013

Last summer when the antinuclear movement was receiving a lot of media coverage, the government and utilities justified their plans for reopening nuclear power plants with statistics purportedly showing how dangerously close to capacity electricity usage is in the summer, when everyone has their air conditioners on. Thanks to energy conservation efforts on everyone’s part there were no overloads, but in terms of households, reibo (cooling) only accounts for 2 percent of overall energy usage when measured in calories. Danbo (heating), on the other hand, accounts for 25 percent of home-energy usage.

Fill ‘er up: Kerosene station in Chiba

Of course, there are various methods for heating homes in Japan. In addition to electricity, there is natural gas, liquid propane gas and kerosene (toyu), but electricity has been increasing in recent decades as a means for home-heating. Between 1980 and 2005, the use of kerosene, which is utilized in space-heating “stoves,” declined from 71 to 45 percent in terms of heating needs in the Kanto area, while both natural gas and LPG increased from 21 to 35 percent and electricity from 8 to 20 percent. However, when you factor in all of a home’s energy needs — cooking, lighting, bathing, etc. — electricity accounts for 50 percent, kerosene 17 percent, natural gas 20 percent and LPG 10 percent of household energy consumption. That was for all homes in Japan in 2009. In 1973, electricity only accounted for 28 percent of overall household energy usage. So with the promotion of all-electric houses in recent years, the overall portion of home heating by electricity has probably gone up even more.

The peak period for electricity usage in the wintertime is between 5 and 6 p.m., and during the current sharp cold spell, electricity usage as reported by Tokyo Electric Power has been over 90 percent during the peak time slot. The main difference between wintertime and summertime is that power plants reduce capacity in the winter, so 90 percent represents less power usage in the winter than it does in the summer. Most air conditioners run on electricity, but as shown above heating systems use a variety of methods, so electrical usage is deemed to be less. But since electricity usage in the winter is on the increase, why aren’t power companies warning people to cut back when the usage gets close to the limit, as they did last summer?

Continue reading about wintertime energy conservation →

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