It's not so strange when you think about it. My understanding is that soda costs basically nothing to produce (I could be wrong, of course, but part of the benefit of not drinking alcohol much is that lots of bars don't charge me for soda, and refills are often free at restaurants), so it doesn't really doesn't matter what they charge for it.
With that in mind, it makes a bit of sense to charge less for more, since people will see the big drink for "little" cost (which still has a massive margin) to be more appealing. They think they're getting a better deal.
If the large drink doesn't fit in a standard cupholder, then those people have to pay a premium for the convenience, and the retailer wins again. It's market segmentation, and it works.
Fountain drinks costs like 5 cents max when you scale large enough (McDonald's level). This is why they can roll out their 'any sized pop for $1' thing during the summer and laugh their way to the bank.
And weird, bars usually charge for soda. Soda is usually like the single highest margin item at any establishment. Their so high margin that buffets can give you infinite refills so you eat less, and still make money off their pop.
If I'm at a pub, or basically any alcohol-based venue that has a proper food menu, then yeah, I'm likely to get charged for every drink. At a "local bar" type of operation, or something like a Royal Canadian Legion branch (I don't know what the American version of this is, but it's basically a bar for ex-service men), then I tend not to get charged. It's a designated driver thing, primarily, but they don't really care if you're actually the DD.
Last Saturday, my girlfriends work had their Christmas party, and I ordered two Cokes.
Bartender: That'll be $2.50, or are you driving?
Me: ...?
Bartender: Non-alcoholic drinks are free for designated drivers.
Me: I could say I'm driving...
Bartender: You could.
Me: pays $2.50
For restaurants, it's just like you said, margins are so high that refills are free. That first drink costs less than any single alcoholic beverage, so I save money right away, and every drink thereafter is pure profit (or more accurately, pure non-loss).
Thanks for the info. I knew they had to exist, but I haven;t so much as stepped foot in the States for over a decade (making me no more than 15 when I was there), so I wasn't familiar with them.
I worked at a Burger King in 1991. We counted our 'food cost' for a medium soda drink at about 8 cents (IIRC large was 10 cents) - that included the cup and an average amount of soda. I'd think that the cost may have gone up a bit over the past 20 years, but probably not too much.
With that in mind, it makes a bit of sense to charge less for more, since people will see the big drink for "little" cost (which still has a massive margin) to be more appealing. They think they're getting a better deal.
If the large drink doesn't fit in a standard cupholder, then those people have to pay a premium for the convenience, and the retailer wins again. It's market segmentation, and it works.