Loss Shifting

Loss-shifting, making your problem someone else's problem and passing the problem on down the line. Many of these types of losses are trivial and affordable to a business that could simply stop the cycle and toss out bad merchandise. There is a point where a responsible business must assume the costs of their errors and not pass their problems on to other people. The most common example of loss shifting is in the buying and selling of fruits and vegetables.

1. loss-shifting as a way of business.

Highly questionable practice ethically.

2. Loss-shifting as a rare event.

Every now and then a near catastrophic event occurs in a business. Things just go wrong and there seems no escape from the imposing problems. For instance, in the case of selling used cars a dealer can unknowingly buy a lemon. Mechanically, things fall apart here and there. To break a way from the problem car the dealer will deeply discount the price but not mention the lemon nature of the car. Having poured endless amounts of money into the car the dealer emotionally wants to escape. He is emotionally numbed by the event and just wants to get away as soon as possible. This numbing is real and it blanks out any ordinary concerns for doing the right thing.