Ripoff 101: Gouging Students for Textbooks

Brad Lucier writes "The San Jose Mercury News covers a report by the California Student Public Interest Research Group entitled "Ripoff 101" about the high, and increasing, cost of university textbooks. The story notes several practices that force students to buy new books instead of used and quotes yours truly about how universities are insulated from the costs of books. Is electronic textbook publishing the way to go?"

Comments

Good old CalPIRG

[koreth]

Guess it takes one to know one. When I was an undergrad at UC Santa Cruz, CalPIRG was best known (at least in my social circle) for the fact that a "voluntary" donation to them was helpfully included as part of our tuition fees. To avoid giving money to them, one had to take the time to fill out an exemption form and turn it in to the university.

That always really annoyed me. I mean, I agreed with a lot of what they did, but the idea of the university acting as the bill collector for a lobbying group, and doing it in such a way that most students ended up giving money to these guys without knowing the first thing about them, always struck me as somewhere between rude and corrupt.

And now they're blowing the whistle on unnecessary costs for university students! Pot, kettle, black.

There oughta be a law...

[LostCluster]

It's a monopoly racket, it always has been and it's going to take something dramatic to break it up.

- Book publishers and authors don't want there to be used textbook competition, they only get paid when a new copy is sold. Therefore, they'll gladly do anything in their power to force a new edition, even if it's simply changing a few image sizes so the page numbers change in a ripple effect with no meaningful content change.

- Professors don't care. In fact in some cases they are paid to select the more expensive of two options by bookstores who offer them a kickback based on a percentage of the sales. (Just face it, what's standing in the way of a professor including an Amazon.com affiliate URL on the course's website, knowing that at least a few students will by the required book that way?) And, often the professor is the author of the book, so every student in their course equals a textbook royalty coming their way.

- Universities often either own the bookstore, or at least own the building that the bookstore operation is renting. Therefore, anything that's good for the bookstore is good for the university.

Unless students vote with their feet by boycotting classes that require overpriced textbooks, and threatening to switch schools or majors if a required course requires the overpriced textbook, there's never going to be any change. So long as new books are required every year, and the publishers can keep it that way, the market for used textbooks will dry up.

Re:There oughta be a law...

[James Lewis]

"Professors don't care. In fact in some cases they are paid to select the more expensive of two options by bookstores who offer them a kickback based on a percentage of the sales. (Just face it, what's standing in the way of a professor including an Amazon.com affiliate URL on the course's website, knowing that at least a few students will by the required book that way?) And, often the professor is the author of the book, so every student in their course equals a textbook royalty coming their way."

I think you are way off here. Maybe my college is different than yours, but in all the classes I have taken at Ga Tech I have yet to have a course where the professor chose a book that they wrote. There was one exception, but that teacher offered his book online for free. I hear professors complain about the high price of books, because most of them don't like to see students gouged anymore than we do. The problem is that there are never enough used books from the last semester to completely forfill the needs of the students of the next, and the professors can't recommend an old version because if a new one is out, the publishers don't make the old one anymore. In my experience, professors care, but it is the publishers who have all the power in the book business, and the only real way a professor can change that is by writing a book for his/her course for free. That takes a lot of time and effort, and few professors have the time for that.

"- Universities often either own the bookstore, or at least own the building that the bookstore operation is renting. Therefore, anything that's good for the bookstore is good for the university."

What's good for the bookstore is the margin they make on textbooks. If the publishers are driving the prices up super high, the margin a bookstore is going to make on a book will be less, because people won't be willing to pay hardly anymore than "wholesale" price. At Ga Tech we have two bookstores. One is owned independently, one by the university (and recently taken over by Barnes and Nobles). The independent one is a few bucks cheaper on average, but the books are still outrageously expensive. Competition tends to drive prices down, and there are other sources like Amazon. But the prices aren't falling, and that's because the price the publishers are selling the books for are artificially high, and there isn't anything the book sellers can do about it. I'm sure they would prefer to have lower priced books as well, so they could make more than a few bucks off of each book they sell.

I am 100% sure that the reason for the high prices of text books is purely the greed of the textbook publishing cartel. Their practices have ironically come to huant them in some areas. If you had read this article a while back, you would have learned about it being cheaper to buy textbooks published by American publishers... overseas. Why you ask? Because the publishers are dumping on overseas markets to drive out local publishers. God only knows what they are doing in this country to stomp out any competition. I'd like to hear the story on that one.

American students really get gouged

[obsid1an]

As an American student, book prices are absolutely ridiculous. A quick example: Physics: Principles with Applications, 5th Ed from Amazon.com costs $131 while the same book from Amazon.co.uk costs 30.09 pounds or about $55.

Pot, Kettle

[Mad Man]

a report by the California Student Public Interest Research Group entitled "Ripoff 101"... several practices that force students...

"Ripoff 101" could also describe Public Interest Research Groups.

http://www.foxnews.com/story/0,2933,80925,00.html

Nader Scams College Kids

Thursday, March 13, 2003

By Radley Balko

Each semester, Meremac Community College in St. Louis, Mo., charged Crystal Lewis for a service called "MOPIRG." "I hadn't the slightest idea what it was," she says. The fine print on her bill read: "If you opt not to support MOPIRG, please deduct this amount from your payment." So she did. But she still wasn't sure what she was no longer paying for.

She was paying for a myriad of causes and advocacy efforts sponsored, endorsed and overseen by Ralph Nader. And if you're in college or have kids in college, the odds are pretty good that you're supporting Ralph Nader too. You probably didn't know that, did you? And that's just the way Nader and his nationwide network of Public Interest Research Groups (PIRGS) would like to keep it.

The PIRG idea was born in the late 1960s, but really caught on through the 1970s and 1980s. It has again picked up momentum in the last few years, due mainly to the publicity that accompanied Nader's presidential campaign. The scam varies from campus to campus, but it basically works like this:

Each time a college student registers for classes, he or she is automatically billed somewhere between three and eight dollars, all of which goes directly to the local PIRG chapter. There, it's funneled directly to the state chapter, where it's used to lobby state legislatures on issues like tougher emissions standards, campaign finance reform and a bevy of other environmental and anti-corporate causes. Very little if any of the money actually stays at the campus where it's generated.

It's also used as "seed money" for more fund-raising campaigns. And about 10 percent of the money goes to USPIRG, the national chapter, where it's used to lobby on the federal level.

The standard procedure for start-up campus PIRGs works like this:

First, they attempt to institute mandatory, nonrefundable "contributions" from the student body either through a student referendum, a petition drive or by going through school administrators. The University of Wisconsin requires all of its students to donate to the local PIRG chapter, as does the University of Oregon, and about a third of the state colleges in New York's SUNY system.

If that doesn't work, PIRG chapters attempt to institute a "reverse check" system, where each student automatically donates to PIRG each time he registers for classes, unless he specifically knows to look for an already checked box asking for his support -- and "unchecks" it.

If they can't win support there, PIRG groups will attempt a "refundable fee" system, where each student is automatically billed, but can request a refund by taking the bill to the university registrar or bursar's office, filling out some paperwork, then taking the form to the local PIRG's campus office to get the money back.

Such systems rake in millions for PIRGs because they put the burden on college students to educate themselves about each line item on their tuition bill, or to go to great effort for a comparatively small refund, particularly unlikely when mom and dad or Mr. Perkins and Mr. Stafford are paying for college anyway.

Craig Rucker is executive director for the Committee for a Constructive Tomorrow, an organization that's been fighting the PIRG scams for years. Rucker estimates that Nader's causes take in somewhere between $10 and $20 million annually from college students, most all of it unwittingly.

What's remarkable is the blatant, tran

How it works at the bookstore

[puck71]

A similar story was posted at another site today, and here's what I posted there, slightly edited for different context:

I have worked at the college bookstore here, and will relate how we do it. First off, our standard markup on new textbooks is 25%. Not great for the students, but also paltry compared to markup on the other stuff we sell (clothing and gifts is like 75% markup at least). However, if a book comes with the price printed on it, we price it at the printed price, even if it's at less than 25% markup. Some stores don't do this, resulting in an obvious rip-off. Of course this depends on the person who receives/tags the book checking each one for a price so it can be set appropriately. I always was very conscientious about this, but at big stores with hundreds and hundreds of books coming in a day, it would be easy to skip this step.

As for the buyback, this is probably what most people don't fully understand. As far as I know, most colleges do it similar to this. We contract book buyers from a used-book company (in our case, Nebraska Book Company, but there are others, depending on location). They come in and are the ones buying the books, not bookstore employees. The bookstore receives textbook orders from professors and puts together a list of books that the store will buy back directly from students. These books will be bought back at 50% of the new price of the book and put on the shelves. If you had bought a used book (we price used books at 75% of the new price) and sold it back for 50%, that's not great, but it's also not terrible. However, if you bring in a book that is NOT on the bookstore's list to buy, then it is the used book company that is buying it, at whatever it's worth on the wholesale market. At that point you are the lowest peg on the book totem pole and should NOT sell your books! They'll buy it for a few bucks, and then ship all of their purchases to their warehouse. They then mark it up and sell the books back to bookstores, who then mark it up again and sell to students. I'm not sure about the percentages in this, but it's not like the bookstore buys books for $5 and sells them right back for $100, at least not at my store. What is more likely is this: say you buy a book for $100 new. You go to sell it back, but the store hasn't received an order for that book yet, so the book company buys it, for maybe about $30. Then the store receives an order for the book and buys some from the used book company for about $50-55 and sells it for $75. The numbers aren't great, and again I'm not sure if they're right, but it's probably something like that.

Finally, even though I work at the store and can get a 10% discount, I've only bought a couple books there the last couple semesters. I've bought them online and saved 36% off what I would have paid, even counting the 10%, so I saved about 42% off what "normal" people would have paid.

How to save money at college:

[Damien Neil]

Don't buy the book.

Seriously. At the start of the semester, ignore the books entirely. Buy the book the day you first need it. I started doing that a couple years into college; for the rest of my time, I think I averaged one or two books a semester. Most classes didn't require the book at all. (Often you could pick between reading the book and going to class; doing both was redundant.)

For classes that did require the book, I was often able to get away with borrowing it from a friend a once or twice.

How well this approach works probably depends on the discipline you're studying; I'm certain not everyone could do this. Give it a try, however--you might be surprised.

(Ripoff #2: School meal plans. One day, I calculated the per meal cost of my eat-as-often-as-you-want plan, and realized that I could eat out at a restaurant for every meal and spend less money. After that, I stopped paying for the meal plan and started paying on a per-meal basis at the cafeteria.)

Re:Unfortunately

[afidel]

God you people all act like the Internet doesn't exist! Unless the textbook is written by your professor and not used anywhere else you should be able to find an online retailer like half.com or cheapest textbooks or any of a dozen or more other sites that buy and sell textbooks that will give you money for your old books.

The Right to Read

[Xebikr]

This would probably be a good point to provide a link to Richard Stallman's short story The Right to Read. Originally written in 1997, it's scarey how close it's getting to reality. If you haven't read it, please do so.

As A Bookstore Owner I Dont Deliberately "Gouge."

[KarmaOverDogma]

As the owner and operator of a small college bookstore in the U.S., I can tell you that customer service is at the top of my list as long as I will not lose money in the long run on the endevor.

I know that the impression of "Gouging" in the eyes of the student (whether true or not) sours students away from my store - usually permanently. News of honest and fair customer service travels fast; news of gouging and dishonest/unfair business practice travels even faster.

For example, students who buy a defective book in any shape or form (as long as they bought it from my store, and are not trying to pass off on me an on-line purchased book; that's why they have to have a receipt) will typically get an exchange with little or no questions asked.

I agree with you completely on the sentimnt of "gouging." When selling back used textbooks, I usually find it best in the long run to give students the information they need to make an informed decision. When your college bookstore offered you $16.00 for a $120.00 textbook it was probably because of one of two circumstances:

1) the book was not on course for the following term (no demand for the book at your school)
or
2) the bookstore already had as many copies of your book as it needed for the following term, so they weren't going to buy a book at an on-course value when the likihood of selling your book to another student is low. If they don't sell your book to a student next term, they can't return it to you later - so they won't assume the risk.

When a book is not "on-course" most college stores (including mine) typically sell these "wholesale" books to a wholesaler (in my case MBS, Missouri Book Services). The wholesaler pays us what we pay you, plus a 20% commission on the sale. So in your case, we would have made $3.20 on the sale of your book. Your book then sits in a very large warehouse until another college bookstore calls them up and says "We need book X" (your book) and they sell it at a profit to that store, which sells it as a used book.

I can tell you that at my bookstore if your book was "on-course" you would have gotten 1/2 the new value (in this case $60.00) and we would have re-sold it for $90.00 used (25% off the new price), regardless of whether you had bought the book new or used. The ideal scenario for me is to buy back books at their "on-course" value because we make money and the student is happy with the good compensation. Unfortunately this is not common because books are usually not "on-course" (though they tend to be more often at larger schools because of frequently repeating/rotating classes).

It is true that no bookstore will knowingly buy back a book that has gone into a new edition (or will soon be doing so). No bookstore that wants to stay in business for long will buy a book they can't sell again, and you're right to be put-off by the fact that new editions come out so frequently. Publishers do this to thwart the used-book market, which you wanted to take part in (and yes, I know frequent new editions do annoy just about everyone except the publishers).

You certainly did the right thing to sell it on your own for $50.00 This is, in fact what we will recommend to students who have an on-course book that we already have enough of.

Although this kind of direct re-selling thing hurts my business I would be *very* reluctant to complain about it because of the tremendous negative impact it would have on the goodwill I need with the student body and the college community to stay in business. Students like you are, in my opinion, reacting to textbook (and higher-ed tuition) pricing that is increasing at a pace that exceeds that of other commodities in society. College Tution costs so much nowadays that after students like yourself are done paying tuition (or, more likely, taking out yet-another-college-loan), they have less and less patience each year for the cost of textbooks and bookstore explinations for them, whether the explination is legitimate or not.

Developing open alternatives

[An Onerous Coward]

Here are some links I dredged up last time this subject rolled through.

Wiki Textbooks
Light and Matter: Open physics textbooks.
An open math textbook
Project Gutenberg, for all the English majors out there.

There are also a lot of books out there which are freely downloadable, but not modifiable. Has anyone here used a free (in either sense) textbook as their primary learning tool in a college class? If so, what was your experience?

Free Online Textbooks

[gubachwa]

The following are some sources of free online textbooks (and lecture notes):

A huge list of math texts.

David MacKay has posted his book Information Theory, Inference, and Learning Algorithms on his website. (This is despite it being a recently published work available through major bookstores.)

The classic, Numerical Recipes in C, is available online for free.

Some more math texts.

Another grab bag of online texts (mostly math).

Yet even more math and CS stuff.

Re:Unfortunately

[FleaPlus]

My personal favorite is addall.com, which searches several bookstores for a particular book and gives you back the lowest prices (including shipping). Incredibly handy.