Bait and Switch: Beware Low-Price Guarantees

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Retailers love that price-matching guarantees attract shoppers. At the same time, they hate it when customers actually try to take advantage of these policies.

Walmart has had a price-matching guarantee for years, and Target and Best Buy have recently introduced their own policies on a full-time basis — which even include matching prices with online competitors like Amazon.

In some ways, it seems inevitable that stores would get on board with price matching. The rise of “showrooming” and increased transparency in the marketplace all but forces retailers to either match prices of competing stores and websites or risk losing sales to them. And yet, even as pricing is becoming more transparent, the price-matching policies employed by some retailers remain something of a mystery to shoppers.

Bloomberg News recently rounded up many of the gripes consumers have regarding the price-matching policies of national retailers such as Walmart and Toys “R” Us. Mostly, the complaints center on how confusing and frustrating the policies can be, especially because the decisions inside stores to allow or shoot down price-match requests can seem arbitrary. “Shoppers can get confused,” Robin Sherk, a Kantar Retail analyst, told Bloomberg concerning Walmart locations. “They go to different stores and there are different policies — even in the same store, if you go to different cashiers.”

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Part of the reason shoppers will find varying policies is that it’s “up to the local managers what matching they will do,” one pharmacist who has worked at several Walmarts explained. Another reason could be that the policies themselves are complicated enough to not only confound shoppers, but store employees as well. The fine print of Target’s “low-price promise” is nearly 1,000 words long and includes more than a dozen exclusions like “prices advertised only as a percent off or dollar off.” The Toys “R” Us Price Match Guarantee, which the National Advertising Division recently recommended be changed or discontinued because it was misleading, states that stores will match prices listed at toysrus.com — but not for “online-only prices.” (Not at competitor websites, either, unless the purchase is a certain brand of baby gear.)

In Walmart’s case, customers have complained because sometimes stores would match prices of slightly different advertised products — seeded vs. seedless oranges, for instance — and sometimes they wouldn’t. Sometimes price matches weren’t allowed on identical products either. The policies seemed randomly enforced, apparently determined by the mood of cashiers and the willingness of store managers to play ball, leading to frustration on behalf of mystified customers.

How many customers are we talking about? Probably not a large number. Sucharita Mulpuru, a Forrester Research analyst, has estimated that maybe 5% to 10% of transactions involve price matching during the holiday season. The figure is probably even smaller during the rest of the year.

(MORE: Hey Walmart, It’s Hard to Make Sales When Store Shelves Are Empty)

For retailers, the true power of a price-matching guarantee lies in the way they make stores seem exceptionally generous, without necessarily requiring price matching on a broad basis. Some consumers see terms such as price matching or a low-price guarantee and think that a retailer automatically lowers its prices to match the competition. The implicit message sent to shoppers is that the store is looking out for them. But this isn’t how the policies work at all; it’s up to the individual shopper to monitor prices and ask a cashier or customer service representative to match prices. If you don’t ask, you don’t get prices matched.

And based on loads of exclusions and fine print in the policies, and the many instances of shoppers requesting price matching only to be confusingly turned down, it appears as if even when you do ask, there’s a chance you won’t get prices matched.

16 comments
JackEReeves
JackEReeves

Wow. I wish people in bentonville would read this

MikeLand
MikeLand

If you buy a big ticket item at a place like Best Buy, always buy it from the store in your area that is in the highest sales tax base.  My area has a 1-percent difference in the various towns.  So you buy a $1000 appliance from one town and get home and find it has damage.  You return it to the store with the cheaper tax base.  Many of those stores are forced to do n exchange return.  So I've found that they will give back the difference in tax at the refund stage.  Then they charge me at the lower rate and the difference is that I get back 1 percent.  It gets better.  I bought some items at Walmart while on vacation and used my tax exempt card because it was for the direct use of my local church.  I took it to the church and when we opened it up, it was damaged.  We decided to order one online.  I returned it to my local Walmart and they insisted on returning it with the full tax applied. So I got back 8.5 percent extra.

MikeLand
MikeLand

I worked at Office Depot for 9 years in the 90's.  Our trick was to contract with the big players such as HP or Acer to bundle their computers and printers specially for Office Depot.  You couldn't price match because the model number was exclusive to OD.  You may find the same item at Office Max but it had a different model #.  But to their credit, at my store, we never refused to price match if we could verify it with a competitor in town.

BruceThompson
BruceThompson

Some Sears stores still honor the Craftsman guarantee...outside of NY. 

BruceThompson
BruceThompson

I have repeatedly been handed..." Lifetime Guarantee"....means the lifetime of the item guaranteed... Monroe Sens-a-trac shocks....GE Lifetime motors....Sears items....Most imported tools I have ever bought. ...When the item fails, its lifetime has ended.   It is totally legal.

RobertoLopez1
RobertoLopez1

I do not lose time arguing with  employees.

I just return the more expensive item and buy the less expensive one

JeffreyGower
JeffreyGower

My wife's experience as a Wal-Mart cashier has been that customers try and screw Wal-Mart, such as bringing a larger-size product and  wanting a competitor's sale price on a lower-sized item.  Her estimate is that half of her customer's ad-match requests are bogus, either not for identical items, or completely made-up ad-match requests (the farm store down the road is not running a sale for $15 on an item Wal-Mart sells every day for $30). 

Spindatwheel
Spindatwheel

I don't see the attraction of price match "guarantees."  What good is it if you have to jump through hoops to get it from your local retailer?  Why not just order on-line for the same price with free or cheap delivery and just be done with it?  Unless you must have the item in your hands the same day, the fuel and time spent traveling to the store and dealing with the cashier or manager are not trivial. 

StephenR.Stapleton
StephenR.Stapleton

I recently replaced my fifteen-year old water flosser. I checked online for the lowest price and, by far, that was to be had at Walmart. The website offered the ability to order it online <i>or </i>pick up from a store. I clicked for store pickup and was directed to the Walmart near me. I wandered over, found the item, and discovered it was more than 20% more than on the web. When I brought this to the attention of the cashier, she told me Walmart didn't match prices <i>of their own website. </i>Eventually, I wound up speaking with the store manager and I pointed out the website clearly indicated the item was available in store for the advertised price. After more than an hour of arguing and my threatening action under California's bait and switch laws, Walmart finally let me buy the item at the price they advertised on their own website.


The squeaky wheel gets the discount.

stumeet
stumeet

@StephenR.Stapleton sounds about as stubborn as me. Once I feel someone is trying to make a fool of me I will spend a dollar to save a dime.  I wonder how much did that hour of proving your point save you?  I am guessing you pulled the price of that flosser down $8 or else you wasted time / money ( assuming you are worth minimum wage ).

I buy very little at large discount stores, mostly because of location but also on principal. I never go into a Walmart without a clear list of what I need and NEVER buy anything else. 

The deal with walmart is simple. Walmart tells the supplier they will pay X dollars for a product. The producer has no choice but to sell it at that price, so they lower the quality of the product to match the price. Only a fool would think otherwise.  Americans have walmarted ourselves into low quality, cheap throw away materialism.  I wonder, do you expect that flosser to last until the year 2028?

I guess the point of my rambling is - don't buy at walmart and expect a good deal or to be treated as a valuable customer, you are just a number.

JackEReeves
JackEReeves

@stumeet @StephenR.Stapleton"The producer has no choice but to sell it at that price"  Does Walmart put a gun to the supplier's head and FORCE them to do it?  No.  If the supplier doesn't want to lower their quality, they don't sell to Walmart.  I have never heard of a Walmart supplier being "forced" to do business with Walmart. Ridiculous. 


Read more: http://business.time.com/2013/05/04/the-bait-and-switch-behind-low-price-guarantees/#ixzz2SQbK6lT0

JackEReeves
JackEReeves

They can refuse. Again, no one is forcing them against their will to sell to WalMart.

SukeMadiq
SukeMadiq

@JackEReeves @stumeet @StephenR.Stapleton 

If a company sells an increasing share of their product to Walmart and they increase production to increase Walmarts demands then they are in a bad position if Walmart insists on a lower price.   They have to meet the lower price or they end up in serious financial troube.  This happens often with smaller companies that sell to Wallyworld.

DeweySayenoff
DeweySayenoff like.author.displayName 1 Like

Here's one that makes sense: "If you find a price that's less than our price for the same item, bring it in and we'll match that price."

Here's the fine print: A percentage off isn't a price.  But one could calculate it based on the regular price of the item being advertised.  Dollars off isn't a price, but one could calculate it based on the price of the item being advertised.  If the calculation is a lower price, that's what they get.  If not, they don't.

How hard is that?

JeffreyGower
JeffreyGower

@DeweySayenoff   Your mistake is that you follow the rules.  For example, there is a major big-box retailer 30 miles away that regularly runs an ad for 40% off any size of a certain brand of olive oil (and the regular price wasn't bad either).  Since Wal-Mart cashiers have no way of knowing all of the thousands of items on sale at all the stores in the area, people just tell the cashier that "Xxxxxx" store has this item on sale this week for $X.xx"  (honest people will actually compute the real Xxxxxx sale price, but others just make up a price); the Wal-Mart cashier has no idea, and is not supposed to check, but take the word of the customer.