When is a Sale Not a Sale? (Shady pricing practices)

[lemniscate]

Some sketchy stuff going on for some Amazon Black Friday offerings.  I regularly shop Amazon Warehouse for better deals on specific things I want.   Usually on Black Friday extended weekend there's a discount on quite a few things in the Warehouse area, which makes them more of a deal.  This year it's 20% off, not everything, and you have to put it in your cart to see if it's a 20% off item.   I had put a long wok spatula in my cart for $7.99, I was going to let it sit to see what discount it may get on BF WH.  Overnight, it went up to $9.49, then with a 20% off.  When is a sale not a sale?  

 

Just a testimonial, I haven't checked many other items, but my skepticism is pretty high for some of A's BF discounts.

Edited November 24, 2022 by lemniscate
better context on 20% off situation (log)

[FauxPas]

2 hours ago, lemniscate said:

Some sketchy stuff going on for some Amazon Black Friday offerings.  I regularly shop Amazon Warehouse for better deals on specific things I want.   Usually on Black Friday extended weekend there's a discount on quite a few things in the Warehouse area, which makes them more of a deal.  This year it's 20% off, not everything, and you have to put it in your cart to see if it's a 20% off item.   I had put a long wok spatula in my cart for $7.99, I was going to let it sit to see what discount it may get on BF WH.  Overnight, it went up to $9.49, with a 20% off.  When is a sale not a sale?  

 

Just a testimonial, I haven't checked many other items, but my skepticism is pretty high for some of A's BF discounts.

 

There was a study done a few years ago that showed that Amazon was hiking up the "list prices" of items so that a percentage discount seemed like a deal, when in fact the item's final price might even be higher than the original regular price. Does that make sense? Study summary linked above but here's the gist of it: 

Quote

 

Researchers analyzed Amazon listings from 2016-2017 and found that sellers often raise prices while displaying a previously unadvertised "list price." The gap between the list price and lower asking price can give the false impression of a deal, when in fact the price might be the same or higher than it was just days prior, they found. 

 

"When you see this list-price comparison, you naturally assume you are getting a discount. It's not just that you didn't get a discount. You actually paid a higher price than before the seller displayed the discount claim," Jinhong Xie, a professor in the Warrington College of Business at the University of Florida, said in a statement. 

 

When you consider vacuum cleaners, for example, the addition of a list price was accompanied by a price hike 22% of the time. Seventy-five percent of price hikes were followed by a price cut within days. 

 

In the real world, it might play out something like this: A Dyson vacuum is listed for $250. One day, a "List Price" of $300 pops up on the page with a slash through it. Simultaneously, the seller bumps the asking price to $275. In the end, buyers think they're getting a deal when the opposite is true. 

 

Researchers observed the same price increases 3% of the time for books and more than 13% of the time for digital cameras, blenders, and drones. Although the study focuses on the 2016-2017 period, the researchers told Insider they have found evidence of similar price hikes more recently. 

 

 

I suspect Amazon may do the same thing for Black Friday sales. 

[liuzhou]

Goodness. Is that legal?

 

It wouldn't be in the UK or China, for that matter.

 

I'm not au fait with the details of China, but in the UK, goods must have been offered at only a higher price for a specified number of days before any 'sale' price can be advertised. The details of that prior price and dates must also be included in the advertisement.

 

Unless if they've changed it since I've stopped paying attention.

[FauxPas]

5 minutes ago, liuzhou said:

Goodness. Is that legal?

 

It wouldn't be in the UK or China, for that matter.

 

I'm not au fait with the details of China, but in the UK, goods must have been offered at only a higher price for a specified number of days before any 'sale' price can be advertised. The details of that prior price and dates must also be included in the advertisement.

 

Unless if they've changed it since I've stopped paying attention.

 

It shouldn't be legal! 

 

Well, the "list price" is really a made up number. The actual selling price is a different thing. Does the "list price" stuff come into play in UK? 

Edited November 24, 2022 by FauxPas (log)

[liuzhou]

3 minutes ago, FauxPas said:

 

It shouldn't be legal! 

 

Well, the "list price" is really a made up number. The actual selling price is a different thing. Does the "list price" stuff come into play in UK? 

 

The list price has to be the actual price the product is offered at over a specified extended period. You can't go making stuff up.

[FauxPas]

2 minutes ago, liuzhou said:

 

The list price has to be the actual price the product is offered at over a specified extended period. You can't go making stuff up.

 

@lemniscate and this study (I believe) were referring to Amazon US. I'm not confident about talking about consumer law in the US, but I do see that Canada has this:

Quote

 

Ordinary Selling Price

 

When is a sale really a sale? If someone puts a fake regular price on a product and then crosses it out, claiming the item is marked down, the consumer might not be saving anything at all. The Competition Act requires that when a business advertises a sale price by relating it to a higher regular price (the full price of the product without any discounts), the business must be able to validate the regular price.

Businesses use two types of regular prices as a reference for claiming savings:

a seller's own regular price, for example: “Our regular price $100, Now $50”

a market price, for example: “List price $100, Our price $50”

Whether businesses reference their own regular price, or a market price, the Act requires that they validate the regular price by satisfying one of two tests:

Volume test: A substantial volume of the product was sold at that price or a higher price within a reasonable period of time before or after the making of the representation.

Time test: The product was offered for sale, in good faith, for a substantial period of time, at that price or a higher price recently before or immediately after the making of the representation.

 

 

From:  https://ised-isde.canada.ca/site/competition-bureau-canada/en/deceptive-marketing-practices/types-deceptive-marketing-practices/ordinary-selling-price

[FauxPas]

Here's another Amazon pricing study. I'm assuming it's based on the US site. 

 

I haven't time to go through it in detail today or look for more studies. But:

• As it turns out, some of those impressive discounts we saw during the hottest sales seasons aren’t that real: some vendors artificially spike the original price quoted, just to show a more staggering discount.

And:

 

The biggest sales seasons—Black Friday and Christmas—actually don’t come with significant price drops.

 

[FauxPas]

This is more about shady marketing and pricing than sale prices, but I think it's pretty closely related. It's not new, but it seems to be picking up steam lately - shrinkflation, or reducing the amount of goods or quality in a product yet still charging the same price or near that. 

 

Campbell's soup did this recently in a pretty obvious way - their can size shrunk. Barelli Pasta packaging is sneakier - the same size but now only contains 410 g instead of 454 g. 

 

I thought it very interesting that Brazil requires manufacturers to show these changes on the packaging. 

https://www.cbc.ca/news/business/marketplace-shrinkflation-1.6654780

[Sid Post]

Shrink-flation is real for many products everywhere, not just Amazon.  Supply Chain issues are further causing pricing chaos.  Then there is inflated shipping charges at many stores so, the sale price may be good but, the delivered price is the same or more by the time it hits your door.

Edited November 25, 2022 by Sid Post (log)

[FauxPas]

38 minutes ago, Sid Post said:

Shrink-flation is real for many products everywhere, not just Amazon.

 

Absolutely! I wasn't implying that this was an Amazon thing. The above examples are due to choices in manufacturing and packaging made by the Campbell Soup Company, Barilla Group, etc. 

 

In general, I think shipping costs to ship to Canada or even within Canada are very high, some of it valid and some questionable. 🙂

 

When gas prices went way up, it was a good excuse for raising some shipping costs but even though oil/gas prices have fallen a lot, the fuel surcharges stay on some goods and services. 

[MSRadell]

9 hours ago, FauxPas said:

 

There was a study done a few years ago that showed that Amazon was hiking up the "list prices" of items so that a percentage discount seemed like a deal, when in fact the item's final price might even be higher than the original regular price. Does that make sense? Study summary linked above but here's the gist of it: 

 

I suspect Amazon may do the same thing for Black Friday sales. 

Not bad as Williams-Sonoma does.  If you look at some of their brand-name items such as KitchenAid, Vitamix, etc. exec everything up by at least 20% in their advertised prices what the manufacturers list price is in most cases.  This is not just a holiday thing, it's year-round.

[dscheidt]

One day in August a few (four, five?) years ago, I decided I needed a new TV.  So I bought one, a not quite top-of-the-range model, of (by modern tv standards) modest size.  It was selling everywhere for about the same price.  In November, it was a headline sale item at several different places (best buy, walmart), for $50 to $100 more than I'd bought it, not on sale, in August.  In February, (after the super bowl) I happened to mention that to someone, and looked, it was a few bucks cheaper than when I bought it. 

[blue_dolphin]

I always check Amazon pricing on camelcamelcamel.com 

Interesting to see how some jump around. 

[FauxPas]

NY Times has an article about a man who's dedicated to documenting cases of shrinkflation in the US.  (Shareable NYT link.)

 

Quote

 

He has dedicated much of his life to exposing what is one of the sneakier tricks in the modern consumer economy: “shrinkflation,” when products or packaging are subtly manipulated so that a person pays the same price, or even slightly more, for something but gets less of it.

Consumer product companies have been using this strategy for decades. And their nemesis, Mr. Dworsky, has been following it for decades. He writes up his discoveries on his website, mouseprint.org, a reference to the fine print often found on product packaging. Print so tiny “only a mouse could read,” he says.

He writes about shrinkflation in everything — tuna, mayonnaise, ice cream, deodorant, dish soap — alongside other consumer advocacy work on topics like misleading advertising, class-action lawsuits and exaggerated sale claims.

 

He spent much of his career in consumer education for the Massachusetts Office of Consumer Affairs and Business Regulation and as an assistant attorney general in consumer protection.

[...]

Recently, Mr. Dworsky has been thinking about his legacy. He believes his biggest impact was writing the Massachusetts food store item pricing law in 1987, which set up rules around price transparency.