Must Read Money Stories for Friday, May 13

by May 13, 2016

Must Read Money Stories

A tipping point.

Joe’s Crab Shack was one of the early adopters of eliminating tipping at 18 trial locations. But the experiment hasn’t panned out, reported Daniel Victor of The New York Times. The casual seafood chain announced it will revert to tipping at all but four locations. Company research found that 60 percent of the restaurants’ customers disliked the switch to no tipping, and didn’t trust management to pass on the money to its employees. The chain had raised its menu prices at the 18 test sites and given higher, fixed wages to restaurant staff, The New York Times reported.

Unemployment spike.

The number of Americans filing for unemployment benefits climbed to more than a one-year high, but analysts and economists blamed striking Verizon workers for the spike, rather than an overall deteriorating labor market, Reuters’ Lucia Mutikani reported. Initial claims for state unemployment benefits gained 20,000 to a seasonally adjusted 294,000 for the week ended May 7, according to Labor Department data. It was the third consecutive week of increases in first-time applications for jobless benefits, Reuters reported.

Big pharma warfare.

Drug makers and the third-party administrators of prescription drug plans, dubbed pharmaceutical benefit management companies, are battling for profit, leaving patients with fewer drug choices in exchange for cheaper pricing, Carolyn Y. Johnson of The Washington Post reported. An analysis funded by drug maker Pfizer found that the number of discount coupons drug companies offering to help reduce the full price of brand-name drugs has steadily climbed. But at the same time, pharmaceutical benefit management companies, like Express Scripts and CVS Caremark, are refusing to cover more brand-name drugs in an effort to gain leverage over pricing with drug makers. While coupons save patients money, drug makers still get the full amount insurance will pay.

Sears’ gamble.

Like many retailers, Sears has struggled to remain relevant in the age of online shopping. The retailer, long known for selling laundry room and kitchen appliances, is testing a new store that will be dedicated solely to the sale of appliances, Charisse Jones of USA Today reported. The new 10,000-square foot store in Ft. Collins, Colorado will open on May 19. The appliance store will feature a 122-inch interactive digital display that will help customers visualize how a new refrigerator, oven or other appliance will look in their home.