Service of Online Sales—Such A Deal Or Not

March 17th, 2016

Categories: Discounts, E-Commerce, E-tailing

Great deal

I had to buy Oreck vacuum cleaner bags online and was surprised to see the price range, from $15 plus postage on the brand’s website to $9.69 plus postage on Amazon.com to $9.12, no postage, at Wal*Mart. [I really wanted to find a store near my office that carried them but was unsuccessful.]

My experience with this product was the opposite of most according to David Streitfeld’s front page Sunday New York Times article, “An Online Deal Just For You (Oh, and Everyone Else, Too).” He wrote about the public’s perception that they get bargains online because the asking price is much less than the “list price, suggested price, reference price or manufacturer’s suggested retail price.” He observed that “hardly anyone is charging” these.

Le Creuset skilletOne of his examples was a Le Creuset 11 ¾-inch iron handle skillet in cherry [photo, right] which Amazon claimed was $200 due to a $60 discount off list. At the same time everyone else was charging $200—Williams-Sonoma.com, CutleryandMore.com and AllModern.com, with posted list prices ranging from $285 to $250. Meanwhile the brand’s website was charging $200.

Another was a Cuisinart Mini-Prep Plus Processor [photo below, left] that on its site costs $40 but that Amazon claims costs $75 and you can get it from them for $40. “Mary Rodgers, a spokeswoman for Cuisinart, said the $75 list price was ‘the highest price you could actually see the product being sold for.’ She said as far as she knew, no one was selling the processor for that price,” he wrote.

Cuisinart Mini-Prep Plus ProcessorStreitfeld quoted pricing strategy expert professor Larry Compeau of ClarksonUniversity, “Everyone expects a deal on the web. Nobody wants to pay retail. Some sellers are now willing to deceive consumers to make the sale.” He said list prices are meaningless.

Overstock.com may be paying the price for deceit. According to Streitfeld, the company is appealing a $6.8 million fine in California for false advertising. Just one example in the case: A customer paid $450 for a patio set at a supposed 55 percent discount from $999 list but the same set cost $247 at Wal*Mart.

Wrote Streitfeld, “Overstock said it followed ‘standard industry practices’ to come up with its reference prices. Internet retailers including Wayfair, Walmart, Rakuten (formerly Buy.com), Crate & Barrel and Williams-Sonoma employ list prices to varying degrees. Amazon, the biggest e-commerce player, uses them extensively and prominently.

“If some Internet retailers have an expansive definition of list price, the Federal Trade Federal Trade ComissionCommission does not.” According to the Code of Federal Regulations, he wrote, “To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer.” Translation: You can’t say that a pen that everyone charges $7.50 for originally cost $15, when it never did.

Streitfeld reported that originally, the list price was to protect consumers who might see one price on a box and a much higher price at the cash register. We’ve come a long way from those days for sure—and not in a good sense.

Do you always compare online prices before punching in your credit card number? Are you enticed by what appears to be a deep dish online discount?

typing in credit card

 

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12 Responses to “Service of Online Sales—Such A Deal Or Not”

  1. EAM Said:

    I’ve noticed this a number of places including Barnes & Noble. For the big name authors, you can do well but for authors that are no longer on best seller lists or more obscure books, you’re better off at Amazon. Furniture stores esp. Raymour & Flanagan or Macy’s always go by list price but there is almost always a sale so the price is actually inflated. Let me also add that Macy’s has a boatload of exceptions on their one-day sales so you may think you’re headed in to get a good deal and come to find what you’re looking for isn’t included in the sale price.

  2. hb Said:

    While I readily agree that one can save money buying online, I find the process time-consuming, tricky, devious, dangerously susceptible to fraud and often disappointing both as to price and quality.

    My best buys have been when I know precisely what I want to buy and find the exact object. Otherwise, give me a merchant I know and who knows me any day!

  3. Jeanne Byington Said:

    EAM,

    You’ve always had to be careful of sales. My Dad, who died well before the advent of e-commerce, became frustrated with these at some venues so that if his prospective purchase was a big one, he would visit the store the day before the sale to make sure that what went on sale was precisely the same.

    Sale or no, he would find that shoe samples often differed from what was being sold. The sample was often of higher quality than what came out of the shoe box for him to try on.

  4. Jeanne Byington Said:

    hb,

    I like shopping both ways. With drug store purchases, where the hand of a textile or fit of a shirt is not an issue, it’s a cinch to buy online. I like to take advantage of 30 percent discount opportunities when I need enough items to meet the minimum required not to pay postage and handling. Shoes and sneakers can be tricky and I’ve not done well buying them online.

  5. JM Said:

    While my children order & pay bills on line, I have 1 time found a gas station used our joint card for a purchase in Nice, France. City investigated and cancelled the purchase. They don’t report back on what scam they found out about but we never get gas @ this local gas station. So needless to say after that occurrence I never have used my credit on line to make a purchase. I prefer to send a check.

  6. Jeanne Byington Said:

    JM,

    There are times I, too, want to send a check: When I subscribe to something, I don’t want a publisher to be able to automatically renew a subscription I may no longer want. Another is when I donate money to a charity. I do not want to receive a zillion emails a day asking for more money and a check, with no email address in evidence, helps.

    As my credit card has been hacked even before I used it, I figure no matter what, this might happen and that the convenience of buying things on line is too compelling to pass up.

  7. Lucrezia Said:

    I have been dealing with reputable online stores for years, avoid shipping costs while having an idea of prices, since purchases rarely vary.

    I might explore one of these “deal-dash” type places, but for small items only. It’s far more convenient to buy larger things at a store, where a return and replacement takes minutes, as compared to days along with involvement with the Post Office/UPS.

    Experience, laced w/a distaste for shopping, reveals that serious bargain hunting/penny pinching, often costs more in the long run. Further, emotions resulting from aggravation are too draining.

  8. Jeanne Byington Said:

    Lucrezia,

    I love shopping but dislike aggravation so if I can’t find something quickly online, I give up, at least for the moment, and move on to something else or think of another solution.

    Someone with hours to spare might bargain hunt on line but nothing beats knowing the cost of something you have bought for years because few can put one over on you.

  9. Martha Takayama Said:

    I am cautious and wary of online shopping and don’t use it very much. It can be very time consuming and at times I switch in mid-order to an 800 number. The pricing manipulations, it seems particularly on Amazon, are frequent.

    Years ago a friend’s brother referred to “list price” as “The biggest myth in America,” meaning that it was never applied. It seems wise to check, as in the case of the Le Creuset, with the online site of the product. Many companies offer sales on line, in store, or by phone. Shoes are generally impossible online. Free shipping and ease of return sometimes make on line purchases more attractive. Unless you know a brand very well it is hard to determine quality and harder to determine fit online. Interestingly Amazon has begun to open STORES!

  10. Jeanne Byington Said:

    Martha

    You and hb agree about the potential time-waste. After going through a rigmarole to place an order only to find an exorbitant shipping charge for an item that weighs what a feather does–which causes me to delete the transaction–is the biggest time-waster for me.

    As for Amazon opening stores, the company has seen the success of ordering on line and picking up at a store’s bricks and mortar outlet and decided to toss its hat in the ring. It happens with restaurants, too! I was waiting for an order for Thai food in a tiny place. A young woman came in well after me, said she’d ordered on line and hers was ready first. She may have sent in the order ages before I arrived–I’ll never know! But to take advantage of all opportunities, a business should be prepared to fulfill a customer’s request in a range of ways.

    Back to Amazon opening stores, it must be getting back a lot of merchandise–such as shoes, about which we both agree–gifts, and anything where fit is an issue.

  11. Martha Takayama Said:

    My time waste includes all the errors in filling out forms or time-outs or loss of connectivity on the computer. And if you have a question about an item, a human being is better able to answer it. Some sites offer the option to consult via email, but I find it tedious and usually frustrating. I had assumed that Amazon’s stores were for browsing and ust depots for receiving merchandise.

  12. Jeanne Byington Said:

    Martha,

    I’m amazed that some sites follow you if you leave without buying, after having begun a purchase, and ask you to return for a day or two! I usually don’t buy something on line if I have a question about it. Those things I buy in a store, with fingers crossed that there is someone who is able to answer. Live chats can be irritating and time sponges–I agree!

    I wrote about the Amazon store in October 2014, http://blog.jmbyington.com/?p=11577, at which point nobody yet knew whether the NYC venue would actually happen and what the store would be. I admit I have not followed the story since.

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