However, their labeling prevents a healthy sharing of ideas. In a worse scenario, they may progress to disapproving views from the outgroup or ultimately to rejecting the outgroup themselves. The second event took place in a grocery store. A woman, after having the items in her cart registered by the cashier, declined purchase because she cannot find her money. The woman's uneasiness and embarrassment was obvious but despite it another shopper in line said that the woman's story may not be true because of the way she looked. The shopper commented that since the woman was wearing faded clothes and had slightly unkempt hair, she must not have lost her money but actually cannot really pay for all of the items in her cart. No conversation took place between the two but the shopper formed an idea that the woman was not telling the truth.

The observation on the shopper can be explained by the physical attractiveness stereotype which Frank Magill, 1998 described as a category "where most people believe that physically attractive people are also good and valuable in other ways."

In this instance, since the woman was physically unattractive to the shopper, she was labeled dishonest. She may have been telling the truth but her physical undesirability at that moment led the shopper to think ill of her.

The label given to her, on the other hand, affected her through the reaction of those who heard the comment. These people looked at her more closely and made more comments and observations about her. Their reaction increased her discomfort and made the situation more humiliating.

The third event took place in a bus. The observer noticed three young people on a happy discussion. They were obviously new acquaintances and were keen on sharing about each other....

As their conversation progressed, their local basketball teams were discussed. When the third teenager mentioned the name of his team, the other two were surprised and they commented that his team was poor because it was the least among the league. They even joked that this means the third teenager was a poor player.
The reaction of the two teenagers over the other was defined by Hogg and Tindale, 2001 as the status generalization process which explained that "when group members differ in their social status outside the group, the standing they achieve in the interactional status structure tends to reflect their outside status."

The teenager who was labeled a poor performer could be his team's best player. But since the other teenagers knew that his team lost most of their game, they generalized that he may be a bad player.

The label given to the teenager may have made him feel inferior and may have lessened his belief on his team.

Clearly, labeling which results to oversimplifying or diminishing of people is an erroneous practice. In the end, this will negatively affect the outgroup and inhibit good work performance and good working relationship among them. The woman, aside from losing her money and wasting her time, was subjected to a diminishing effect of labeling. The teenager may feel bad about his companion's view on his team that he might quit from it or he may share it with his team mates who might react on the same way.