It’s happened to everyone: You buy a holiday gift, and soon regret making the purchase because the same item later appears on sale for a fraction of the price. With Walmart‘s new holiday season price-matching promotion, shoppers are supposed to rest easy and stop worrying about the possibility of cheaper prices down the line.
Today, Walmart introduces the Christmas Price Guarantee. If a customer buys an item at Walmart between November 1 and December 25, and later spots the same exact item at a cheaper price elsewhere—and can prove it via a published ad—Walmart will provide the customer with the difference in a gift card.
Here’s part of the pitch in a press release sent out today:
“The greatest gift we can give our customers this holiday is great low prices on the things they want most,” explained Duncan Mac Naughton, chief merchandising officer, Walmart U.S. “Walmart is easing shopping stress this Christmas by allowing customers to shop when and how they want, all while guaranteeing low prices through the entire holiday season.”
From the retail perspective, Walmart’s Christmas Price Guarantee succeeds on at least two levels. First, consumers will be more inclined to shop from the get-go at Walmart. They’ll snatch up holiday gifts without worrying the merchandise will be available later at a cheaper price. The retailer not only attracts more shoppers, but brilliantly also attracts shoppers who aren’t overly concerned about the prices. Those are the kinds of shoppers stores love best.
Second, because Walmart gives shoppers the difference in price with gift cards rather than straightup refunds, the new promotion guarantees its stores will benefit from customers being forced into a second round of browsing the aisles for merchandise. Well, actually, let’s take a step back: Each year, billions of dollars worth of gift cards go unused, and the shopper obviously never sees a payoff from the price guarantee if the associated gift card is never redeemed. If the gift card is used, chances are the shopper will wind up spending more than the balance on the card. That’s another win for Walmart.
Also, studies show that, compared to cash, debit or credit cards, shoppers use gift cards more foolishly, without regards to price. Why? To many people, spending a gift card doesn’t feel like spending at all. It feels like getting something for free. When the time comes to redeem that gift card at Walmart, the shopper is more likely to buy something silly—something he probably never would have considered had he not returned to the store because of the price guarantee.
If utilized carefully and properly, Walmart’s Christmas Price Guarantee provides a great benefit for holiday shoppers. The guarantee is also all but guaranteed to benefit Walmart stores—by bringing in customers who aren’t all that worried about prices initially, who are likely to be repeat customers, and who may be inclined to spend money in an impulsive, thoughtless manner. So take the guarantee for what it is, and keep your guard up.