[lukevp]

I mean… the grocery store can make more money by double scanning an item I purchase, or McDonald’s can skim some money by giving everyone one less pickle. At some point the service quality has to be intrinsically motivated by the company wanting to preserve their brand, right? How much could they make off stolen luggage that they’d legitimately lose more on purpose? Surely the payout they have to make of losing luggage both monetarily and indirectly through brand devaluation is greater than the amount of money they’d make selling the luggage?

[dcx]

I agree in the abstract, but people and companies operate under bounded rationality. Customers can't easily price the expectation of lost luggage. Companies are made of subunits with independent budgets, each optimizing for incentives with short time horizons.

McDonald's is actually a good example, they did exactly this. IMO one reason their brand has been devalued is death by a thousand cost cuts. Each cut is imperceptible and seems like a win. But over several decades the net effect is a disaster. (IIRC Fast Food Nation documented some ideas about this process)