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Prisoners as consumers: Behind bars is big business

July 24, 2014

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A prisoner in this Pay-to-Stay jail program can pay for a little safety. Photo: NBC News

We write a lot about consumer demographics, from college students to young parents to Baby Boomers – but there’s one cohort of spenders that tends to get overlooked even though it comprises a pretty significant market:  Prisoners.

NBCNews recently ran a very interesting piece, “Prison inmates offer captive market for gadget makers,” that was rich with detail about the way ordinary objects like electric typewriters must be modified for sale in prison.   The article says prisoners buy a whopping  $750 million a year worth of “gizmos” – many of which must be encased in see-through plastic shells and secured with special screws to prevent their use for hiding contraband.

Making and modifying electronic gadgets for prisoners is a fascinating angle and an idea you can use as a springboard to a variety of stories about commerce behind bars.  It’s a growing market; according to this NAACP fact sheet, America’s incarcerated population quadrupled from about 500,000 to more than 2 million between 1980 and 2008.   And this recent story from The Economist points out not only the vast numbers of people imprisoned in the U.S., but what it calls the “bewildering array” of institutions used to lock up people, from state and federal prisons to local jails, youth detention centers, military centers and more.

Obviously the incarceration rate in the United States and the major commercial interests that may motivate it are separate and very serious stories.  But taking a look at commissary operations in the institutions in your area will illuminate a little-seen facet of life behind bars.

What are your region’s incarcerated people spending, and what are they spending it on?  Ask your state corrections department for commissary sales data; this 2010 report from the Texas Tribune, using figures obtained via FOIA, found that Texas prisoners were spending $95 million a year in that state alone, with the prison system raking in a 30 percent markup on most goods.  (One more way it’s expensive to be poor.)  Note the chart accompanying this story that breaks down spending in a variety of categories, from religious items to wellness products to chips and soft drinks.

What are the typical costs for extra clothing, and where does it come from? What are special manufacturing, processing, packaging and delivery concerns for vendors to commissary operations?

There appears to be quite a brisk business in supplying inmate commissaries; a quick Google search found several large players such as Keefe Supply Co. and McDaniel Supply Co. – and this piece last fall by the Decatur, Ill. Herald-Review says “Smaller dealers being pushed out of prison commissary contracts.”  Why not take a look at activity with commissary and canteen contracts in your state prison system, to see which firms are winning and which are losing business?

If you cover tech, there’s an angle for you here, too:  Software and consulting firms that provide and manage “inmate banking” systems that track commissary accounts, purchases, etc. – there seem to be quite a few services such as CommissaryDeposit.com that operate a sort of PayPal between prisoners and their supporters on the outside; find out which ones are in use in your neck of the woods and detail the procedures, fees and other parameters.  Does the prison operator get a cut of transaction costs?


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