You Spent $1,500 on Virtual Bazookas? Kids Are Splurging on Digital Goods

[question everything]

Lisbet O’Connell wasn’t aware her 13-year-old son was spending money on virtual weapons and vehicles in his videogames until she noticed a series of $20 and $30 charges from Microsoft Corp. MSFT -0.59% ’s Xbox on her debit card—all in one day. She then looked back and tallied a three-year total for these incidental purchases: $1,500.

The days of children blowing their allowance on comic books and candy are long gone. Kids are now spending hundreds or even thousands of dollars on more ephemeral goods such as outfits for their videogame avatars and gems to help them level up in games. Virtual spending is leading to debate among parents and lawmakers over whether it’s creating unhealthy financial habits in kids. Some parents are shocked. Others shrug and say, “It’s their money!”

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So why is this different than a child buying a candy bar that will disappear within seconds? It’s not about the product itself, experts say, it’s about the habits such spending instills. Walking to the store to buy a candy bar requires planning and likely involves cash. Once cash is gone, it’s gone, and children can understand that. Buying an item while playing a game is instantaneous. Meanwhile, the dollar amounts add up without kids noticing how light the piggy bank is getting.

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Ms. O’Connell, who works for an actuarial consulting firm in Atlanta, asked her son, Steven Flaxman, about his $1,500 Xbox bill. Steven told her that since the transactions were in virtual coins, not dollars, he didn’t realize they were tied to his mom’s purse...She said Microsoft refunded her for 90 days’ worth of charges, about $450, and that she has since removed her debit card from his Xbox account.

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Now, Ms. O’Connell pays Steven his weekly $20 allowance in gift cards, which he spends almost entirely on digital goods. “If he wants to spend it on that, I can’t complain because it’s money he’s earned,” she said.

More..

https://www.wsj.com/articles/you-spent-1-500-on-virtual-bazookas-kids-are-splurging-on-digital-goods-11563291006 (paid subscription)

[keithbvadu2]

1. Virtual coins - real money

Virtual coins - real money

[customerserviceguy]

2. P. T. Barnum

would have loved this.

[PoindexterOglethorpe]

3. Stories like this pop up frequently.

It's never a good idea to let a child have access to or the use of a credit/debit card without adult supervision of every single purchase. Even us adults don't always control our spending with those cards, but for the kids the money isn't real.

However, it should not have taken the mom THREE years to notice the charges. She works for an actuarial consulting firm but apparently never takes a look at her bank statement or debit card amounts. I would not want her to consult for me or my company.