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What Is Perishability?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 12 March 2014
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    2003-2014
    Conjecture Corporation
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Sometimes referred to as service perishability, "perishability" is a term that refers to the understanding that, unlike goods that can be manufactured in mass quantities and stored until they are needed, services are created and consumed when and as they are required. If the opportunity to make use of those services is lost, there is no way to recover or store those services for use at a later date. Instead, new services are created and utilized when and as there is the possibility to use them.

One of the easiest ways to understand the concept of perishability in a business setting is to think in terms of tickets needed to attend a sporting event, such as a minor league baseball game. Tickets are made available to the general public, allowing them to pay a price and secure the service or right to attend the event. Any tickets that are not sold for a particular game in the series perish once the game is over; they cannot be recaptured and used for a subsequent game. Instead, new tickets are made available for new games. Any of those tickets created for the later games that are not sold will in like manner perish once the game has been played.

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The same general concept or perishability holds true when a client is unable to make a scheduled appointment with a professional. For example, if a patient has to cancel and reschedule a doctor’s appointment, the opportunity to make use of the doctor’s services at the originally appointed time ceases to exist or perishes. In like manner, canceling an appointment with an attorney means the services that would have been rendered at that time also perish. In both instances, the professionals will provide a new round of services when the rescheduled appointments do take place, provided they are also not canceled.

There are instances in which perishability may have some impact on the cost that is ultimately paid to enjoy services of some kind. For example, if a teleconference provider is offering a limited time special on conference call rates, a client who chooses to not conduct a conference call during that time loses on the chance to hold a meeting at a lower cost. While it is still possible to enjoy services at a later date, those services will be billed at the standard pricing rather than the temporarily reduced rates, which means the customer will ultimately pay more for the conference than if he or she had engaged the services during the limited time special.

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