Pricing policies immoral?

Discussion in 'Growing and Managing a Business' started by elle310, Oct 6, 2010.

  1. elle310

    elle310
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    Here is a situation, do you think this is moral? Or is is economical?

    A retailer of large home appliances advertises that if customers find a better price for the exact same product at another retailer, it will reimburse the customer the difference between the two prices plus 10%. This retailer then makes arrangements with the appliance manufacturer to carry the same appliances under different model numbers and/or serial numbers, i.e., model numbers that no other retailer has available.
     
  2. PaulPinnacle

    PaulPinnacle
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    I've no knowledge in this area (I'm speaking as a consumer here and not giving a legal or knowledgeable point of view, simply a personal one), but I'd believe that goes past a question of morality and falls into a question of legality.

    I'd assume it is a relatively straight forward case of false advertising... or at least I'd hope it would (I'd certainly wish the company the best of luck if they tried the "but it's a different model number" on me :p).
     
  3. Kay

    Kay
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    LOL, me too! They would be tangling with the wrong person. I agree completely that would be false advertising, if not plain old fraudulent practices. It's certainly not economical if they have to pay for a court case, the loss of sales because of bad publicity and absorb any drop in any share value, plus fines.
     
  4. Fergal

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    I agree that it would be immoral. Consumer law is generally pretty much in favour of the consumer and judge's are not too keen on businesses that deliberately deceive their customers. If the model number is different but the product is essentially the same, I would hope that a judge would rule in favour of the customer. In any case even if the company were to win, the cost to them in negative publicity would be quite damaging.
     
  5. Joseph.Shivell

    Joseph.Shivell
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    I do not know what country you are from, but here in the US, this is a common practice. Some will actually reduce the price paid, rather than reimburse the customer later. If a lower price is found in a competitor's ad within a limited period of time after a purchase is made, the customer would receive a refund as you stated above. All the customer would have to do is bring a copy of the competitor's ad to the store.

    As others have stated, simply changing a model number, and claiming it is a different product, would be a little "iffy", to put it mildly. Manufacturers, however,would like to sell to different retailers. So, they will take the same item, and add or subtract one or more features so that it is not exactly the same. For instance, a refrigerator with an ice maker that also dispenses cold water would be available at one retailer, while the exact same refrigerator, with an ice maker that dispenses only ice cubes or crushed ice, but not cold water, would be available at another retailer. This would allow the manufacturer to sell to more retailers, while allowing the retailer to have an exclusive item that no one else has.
     

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