Critical Issues
Rent-to-Own centers have a tremendous appeal for low income customers. The chain gives them immediate use of brand name merchandise without future obligations. The poor and nearly poor make up the vast majority of RTO customer, 80 per cent of the stores’ customers live within a three to five mile radius of the store. The main critical issues that we found regarding RTO business practices are: taking advantage of low income people, no credit checks, overcharging- 100 per cent to 300 per cent interest rates, high pressure sales, repossession tactics, and government regulations of the industry.
Taking advantage of lower income consumers - RTO centers take advantage of lower income people, despite the extreme profits (100% - 300%) made in renters fulfilling contracts. For example, Rent-A-Center (largest RTO firm) makes big money in repossessions. Three out of four Rent-A-Center customers have items repossessed. There have been times where a $179 VCR brought in over $5,000 in a five year period. To make that much of a profit from one item seems too greedy, therefore unethical.
No Credit Checks - promotes an own now pay later policy with no strings attached. The business model sounds very appealing to those with an economic disadvantaged or poor credit. RTO targets the lower middle class, all the way to unemployed individuals and even those in government assistance. They know a customer can not afford it but they will rent to them anyway, anticipating that the customer will not be able to pay RTO centers encouraging unregulated renting practices since the majority of its profits come from repossessions.
Highly Inflated Prices - RTO interest rates typically exceed 100 per cent and have been as high as up to 300 per cent. For example, at Rent-A-Center, a television that had a suggested retail price of $299, was contracted out at $11.70 per week for 78 weeks and totaled $920.10 to own, an effective annual interest rate of 200%. Rent-A-Center services can be misleading; they attract low income families by offering supposedly easy low payments with the idea to own. Many of these customers are often educationally disadvantaged and may not fully understand the terms of the rental. Through RTO, a poor person pays $1,200 for a $400 television set that the average person can buy for $450 on credit.
Although every one are employed, at least some of the time, any one may often find it difficult to save enough money for a deposit on a rental property. As a consequence, some minimum-wage workers end up in living situations that are actually more pricey than a month-to-month rental. For instance, some minimum-wage workers rent rooms in week-to-week motels. According to Ehrenreich, “Given a few days or weeks more to look, maybe I could have done better. But the meter is running at the rate of $59 a day for my digs at the 6, which are resembling a Ballard creation more every day.” (Ehrenreich, 57) In other words, Ehrenreich knows these motel rooms tend to cost a much more than a traditional rental, but are accessible to the minimum-wage workers since a large deposit is not a requirement. If a person is unable or unwilling to pay for a room in a motel, some might live in his or her car, in a homeless shelter, or even on the street. Or as Morgan and his fiancee Alex, who settled on a $325 dollars a month in a renovated crack den (literally) that allowed them to pay the deposit over a few months, only with $300 dollars in savings, this was their best option. Minimum-wage workers who cannot afford a stable home, but might be able to afford a car, or vise versa, cannot afford a car, but be able to afford a house, adopt
There is an evil company in Arkansas, some say. It's a discount store-a very, very big discount store-and it will do just about anything to get bigger. You've seen the headlines. Illegal immigrants mopping its floors. Workers locked inside overnight. A big gender discrimination suit. Wages low enough to make other companies' workers go on strike. And we know what it does to weaker su...
The Wal-Mart Corporation is a multi-billion dollar low-cost retail organization, consisting of 6400 stores and 1.8 million sales associates worldwide. Wal-Mart’s influence on the retail world and the enormity of their corporate size is unparalleled. Wal-Mart can easily report sales of $312.4 billion dollars per fiscal quarter and net profits of $3.8 billion dollars. Wal-Mart promises her customers "Always low prices. Always!" and upholds this motto by providing low prices to her customers and high return on investment to her stockholders. One way that Wal-Mart has managed to maintain a competitive edge over other low cost retail giants and provide low prices is by cutting wages and by not offering too many company benefits to their employees. Full-time employee working at Wal-Mart only make $8 an hour, while only 45% of the workers can afford to be covered by health insurance. Wal-Mart also increase part time employees from 20 percent to 40 percent so that they do not have to cover all of their employees for health insurance . Although Wal-Mart may not provide excellent benefits to her employees, it successfully performs as a legitimate business operating in a capitalistic society. Wal-Mart upholds the primary fiduciary duty to satisfy her stockholder and follows free the market libertarianism model, which states that a business should not interfering with the free market. In a free market Wal-Mart has a direct responsibility to her primary stockholders rather than the employees of a company.
On 10/28, Clients Shantae HOH and Jennifer co-applicant reported and completed the assessment & this Initial ILP. The clients returned back to Auburn on 10/25 after being cited for curfew violation. The clients are currently eligible for full shelter services including housing assistance. Both clients are aware and understands they must seek and accept first suitable housing. HOH inquired about eligibility for the LINC and SEPS Rental assistance Subsidies. CW explained the criteria for both programs and provided them with information on SEPS. Both clients reported being employed, HOH states she has two jobs, Client works at Superdry Clothing Store & Macys Dept. Stores as a Sales Associates Co-applicant Jennifer reported she is employed
This means that someone who pays $1,000 in monthly rent will pay $600 more next year in rent. While this property management decision sounds like it will bring in more money, it does not always work out that way. If the tenant moves out, then the property manager has to find a new one. Finding a new tenant can easily cost $600. When you include the costs of repairs on the property, landscaping costs and utility charges, it can cost more than $600.
Lastly, practicality, which includes time pressure and flexibility, can be considered an irrelevant factor in this public policy formation. As it is mentioned at the end of the article, “Rent regulation is very likely to go away, eventually, even without any explicit effort to kill it. Some 231,000 units have been deregulated over the last 30 years.” As older apartments available at an affordable price reach the end of their cycle, naturally new apartments for the wealthy are being constructed to replace them. Overall, in the debate over Rent Control, the six key factors that drive public policy formation must be considered in order to reach an effective decision.
In my experience as a real estate sales representative, I have looked at many rental properties that are owned by people that are commonly known as slum lords. These units are in disrepair with leaks, mold, mildew, holes in walls, ceiling and poor floor coverings. Many people are afraid of pushing these issues to have repairs done as they might lose their shelter or their rent could be increased. There are people living in a rooms in a house, that are also at risk as they don’t realize they are not protected under the tenant act so the owners can remove them from their shelter without notice. I have also experienced people living in abandoned commercial buildings ...
the rent is set at a lower than normal level, an unsatisfied demand is created.
The argument above stated that the elimination of rent control is not a problem because the majority of renters didn't protest for the regulation. This argument relies on several unsupported assumptions and therefor fails to be persuasive.
The restrictions on the amount the rent can be raised have prevented the law of supply and demand to find the market clearing price allowing for the supply of rental units to meet the demand. Edmonton on the other hand, even in times of economic boom has not implemented any form of Rent control. Therefore, allowing the laws of supply and demand to set the price. By doing so one can see when comparing Edmonton’s vacancy rates and population growth have allowed for Edmonton’s supply of rental units to catch up to the demand for rental units. Consequently rent control has done the exact opposite of what it was implemented to do in the first place, instead of trying to make sure everyone has access to affordable housing it has created a shortage for
In recent years, companies are becoming socially responsible and now stakeholders almost expect a company to have CSR policies. Therefore, in twentieth century, corporate social responsibility (CSR) became an important development in public life (Barnett, ND).Corporate social responsibility is defined as “the ways in which an organisation exceeds the minimum obligations to stakeholders specified through regulation and corporate governance” (Johnson, Schools and Whittington, N.D cited in March, 2012). Stakeholders can be defined as “those individuals or groups who depend on the organisation to fulfil their own goals and on whom, in turn, the organisation depends” (Johnson, Schools and Whittington, N.D cited in March, 2012). There are many purposes for this essay, the first purpose is to descried the key principles of corporate social responsibility and explain their importance for stakeholders. Secondly, is to show how far this company follows those principles in order to be accountable to at least three of its stakeholders. In this essay, three stakeholders, environment, customers and employees will be evaluated respectively and the key principles of the stakeholders will be examined.
Block, Walter. "Rent Control." : The Concise Encyclopedia of Economics. N.p., n.d. Web. 10 Mar. 2014.
Rent Way is the 3rd largest player in the Rent-to-Own industry with 2005 revenue of $516M. The company founded in 1981, currently operates 784 stores across 34 states. A few years ago, Rent Way was investigated for fabricating entries in its financial statements that increased the company's earnings for its 2000 fiscal year by about $30 million. This financial reporting fraud was a misrepresentation of the company’s financial condition and led to lawsuit filings from shareholders.
This article reviews the ethic and social responsibilities of multinational companies and offers a strategic approach for future interaction with other cultures. Not much has been researched or recorded about how multinational managers handle ethical and social responsibilities. The article defines corporate social responsibility as “the firm’s obligation to respond to the externalities created by market action” (Husted & Allen, 2006, p. 839) with externalities further defined as being the reaction to a corporate action. There has not been a theory to distinguish local from global corporate social responsibility and previous discussions regarding ethics or social responsibility centered on social contracts or universal principles. Studies show that there is a difference between universal principles and local norms. Environmental protection and human rights fall into the global social responsibility. By contrast local responsibility is based on needs and circumstances happening locally. Local needs can be the same as global needs such as fighting AIDS or unemployment in South Africa. However, multinational that are not affiliated with South Africa have little incentive to contribute toward South African AIDS and cannot actively affect the unemployment which are local social responsibilities but might fund a global AIDS awareness campaign which is a global social responsibility. Once a firm defines the local needs they must devise a strategy to manage it.
Business organizations regularly run into demands from various stakeholders groups when conducting day-to-day business. These demands are generated from employees, customers, suppliers, community groups, governments, and shareholders. Thus, according to Goodpaster, any person or group of people that can shape or can be shaped by attainment of the objectives by an organization is considered a stakeholder. Most business organizations recognize and understand their responsibilities to these groups and endeavor to honor and fulfill them. These responsibilities are often communicated to the public by a statement of principles or beliefs. For many business organizations, corporate social responsibility (CSR) has become an essential and integral part of their business. Thus, this paper discusses the two CSR views: the classical view and the stakeholder view. Furthermore, I believe that the stakeholder view has brought ethical concerns to the forefront of businesses, and an argument shall be made that businesses would improve both socially and economically if CSR, guided by God’s love, was integrated into their strategic planning.