Hey, senior discount, you look so young!

J. Peder Zane / New York Times News Service
Published Oct 4, 2013 at 05:00AM / Updated Nov 19, 2013 at 12:31AM

Like millions of Americans, Greg Petty got sucked into the time warp on his 50th birthday.

Fit and forward-looking, he was confused by an unexpected present: an invitation to join AARP, formerly the American Association of Retired Persons. Thinking it couldn’t be for him, Petty, a magazine publisher who lives in Cary, N.C., crumpled it up and threw it in the trash.

Time stops for no man and neither does AARP. When he was greeted with another membership card on his 51st birthday, he read the material and found that aging had its privileges. “I’ve used it to save on car rentals, hotel stays and lots of other things,” Petty said. “After paying full fare for my entire life, it seems fair to get a discount.”

Welcome to the flexible and often generous world of senior discounts, where prime of life can be considered old and even the wealthy are entitled to special deals. It is a land of shifting perspectives reflecting the realities, economic and otherwise, of a graying America.

Look at it one way and you see that many people are living longer, healthier, more active lives than ever before. From this angle, 70 is the new 60.

Another view suggests that 50 is the new 65, as businesses continue to lower the bar on deals for older Americans. Plenty of restaurants still offer the early-bird specials favored by blue-haired women and men in oversize windbreakers, but they are being joined by ski resorts and sky diving outfits, high-tech companies, rock concert promoters, dating services and wedding planners.

Many Americans may recoil at the senior label, but most are happy to enjoy the discounts. AARP reports that 80 percent of its 37 million members say they take advantage of its discounts or deals each year. The website seniordiscounts.com lists more than 270,000 offers pegged to people 50 and older, double the number from years ago.

Yet as more enjoy such benefits while holding the drawbacks of aging at bay, critics are questioning not only the business sense but the morality of age-dependent discounts.

“When the population of older Americans is growing and those people claim a greater share of the country’s wealth, offering someone a discount just because they have reached a certain birthday is on the edge of shameful,” said Ken Dychtwald, president and chief executive of Age Wave, a research and consulting firm that focuses on aging.

An ongoing debate

A debate about senior discounts has taken off since the Pew Research Center reported that older Americans had achieved greater economic gains than other groups. Combing census data, it found that the median income for households headed by Americans 65 and older had increased more than twice as much between 1967 and 2010 as the gains enjoyed by households headed by adults 44 and younger.

Pew also said the net worth of older households grew 42 percent between 1984 and 2009, while that of households headed by adults 35 and younger plummeted 68 percent. “As a result,” Pew reported, “in 2009 the typical household headed by someone in the older age group had 47 times as much net wealth as the typical household headed by someone in the younger age group.”

Don Campbell, a member of USA Today’s board of contributors, used these and similar statistics in a widely discussed 2012 column, “Why We Should Kill Senior Discounts.” He recalled snickering to his wife, who had just turned 55, that she could now save $3 on a $9.50 movie ticket. “But then I felt guilty — well, almost — when I noticed the family behind us with teenagers who were getting no break at all as they laid out upwards of $50 before they even got to the popcorn stand.”

Some economists contend that the Pew report is misleading. Dean Baker, co-director at the Center for Economic and Policy Research in Washington, said it was not surprising that, after a lifetime of work, older Americans had more assets. But, he said, their median net worth in 2011 — $170,494 — is close to the median price of a new home and hardly counts as “wealth.”

Critics may see people jumping out of Jaguars to buy discount movie tickets as the latest iteration of “welfare queens,” but by and large many Americans at or near retirement age have more in common with struggling pensioners than with Warren Buffett.

The median income for people 65 and older in 2011 was $27,707 for men and $15,362 for women, according to the Department of Health and Human Services. Even if those numbers are combined — and they shouldn’t be because many older Americans, especially women, live alone — they are well below the current median household income of about $51,000.

Millions of older people are relatively wealthy. But, Baker said, the real story is not the false equation between age and wealth but the stark financial challenges faced by many Americans, especially the young, who are saddled with record levels of student debt and a stagnant job market. “Instead of creating generational warfare by attacking older Americans for what little they have,” he said, “we should be addressing the broad challenges” faced by almost every age group.

Why offer discounts?

If the economic realities of older Americans are blurred by appearances, equally hazy is the rationale for gray discounts. Are they acts of altruistic respect or business savvy? Probably a bit of both. And for clarity, it helps to trace the roots of the fundamental idea — that people should receive benefits at a certain age — which in modern times stretches back at least to 19th-century Germany.

It was then that Chancellor Otto von Bismarck, confronted with rising complaints about poor older people, proposed government pensions for them. With the average life span then about 45, he did the state coffers a favor by setting the golden age of entitlement at 70 (it was lowered to 65 in 1916).

President Franklin D. Roosevelt was more generous when Social Security was created in the Great Depression, sticking with Germany’s magic number at a time when more Americans could expect to see that age, since life expectancy had shot up to around 62.

Discounts for older people became popular in the 1960s and ’70s, according to William R. Smith Jr., a professor of marketing at the Graziadio School of Business and Management at Pepperdine University. Most were aimed at people 65 and older, who were, on average, poorer than other Americans. In 1959, 35 percent of these older Americans lived in poverty, more than double the rate of those in the 18-to-64 range.

The discounts had a solid business purpose. Companies were looking for new ways to nudge a relatively small and frugal population that had weathered two world wars and a depression to spend some money. Other strategies, like early-bird dinner specials and off-peak travel discounts, sought to entice customers with flexible schedules.

Today, the old rationale is being turned on its head as the thrifty elderly of old give way to spendthrift boomers. “Boomers have the most and they spend the most,” said a 2012 Nielsen report, “Introducing Boomers: Marketing’s Most Valuable Generation.” It said their buying power would only increase. In four years, “close to 50 percent of the adult population will be 50 and older and they will control 70 percent of the country’s disposable income.”

So some business leaders are skeptical of the discounts. Most banks and major airlines have dropped age-related deals. Many companies that continue the practice do it quietly. Petty, the North Carolina magazine publisher, who publishes Boom! Magazine, said none of his advertisers were interested in trumpeting their senior discounts when he pitched the idea.

They continue to thrive in large part because of the power and influence of AARP. Dychtwald of Age Wave said the powerful organization should be seen as a “buying club” that gained leverage by expanding its membership.

“For every five years they’ve dropped the eligibility age, they’ve gotten around 10 million potential new customers,” he said. “That’s why the membership age has dropped to 50.” AARP said it lowered the age because “younger members valued our preretirement planning information and other financial security tools.”

Outdated strategy?

Some aging experts say discounts reflect tired marketing strategies, and a bit of irony. The great “Mad Men” era of advertising began during the 1960s as companies reached out to the first waves of baby boomers. These youngsters were the new generation that brands like Pepsi put at the center of the consumer universe, defined by the 18- to 35-year-old demographic.

Older Americans were largely an afterthought to companies that didn’t sell dentures or devices to aid people when they had fallen and couldn’t get up.

“The thought was that ‘older people’ had already made their decisions about what products and services they liked, weren’t interested in new things and were intensely loyal to their favorite brands,” said David Weigelt, president of Immersion Active, which develops online marketing strategies aimed at baby boomers. “That may have been true once but recent research shows that boomers are maintaining their youthful ways, with a taste for new products and little brand loyalty except for products like toothpaste.”

In other words, the ageism that put young boomers at the center of the marketing world no longer works. Weigelt says smart companies are now starting to market to boomers with the same energy they apply to the young.

Nevertheless, the discounts aren’t likely to disappear any time soon. When making presentations to older adults, Dychtwald said he asked people to raise their hands if they thought old age began at 65. “No one does,” he said.

When he raises the age to 70, “a hand or two goes up.” By the time he gets to 80, most agree that is old. “Then I ask them if they are willing to give up the senior discounts they could receive before then, and nobody raises a hand.”

Illustration by Wesley Bedrosian / New York Times News Service