It looks like companies are getting sneaky with high-tech shopping apps, using them to bait you into visiting their stores or Web sites, then switching prices on you. This and other tactics have been used online for well over a decade, as this 2005 report shows. Now Target appears to be doing something similar.
In a two-month investigation, that began with a concern from a viewer, KARE 11 found Target’s app changes its prices on certain items depending on if you are inside or outside of the store.
For instance, Target’s app price for a particular Samsung 55-inch Smart TV was $499.99, but when we pulled into the parking lot of the Minnetonka store that price suddenly increased to $599.99 on the app.
To test this further, we selected 10 products on the Target app at random, ranging from toys to bottled water to vacuum cleaners. We found that when we entered the store, four of the 10 products jumped up in price on the app.
. . .
Our list of 10 items was a total of $262 cheaper in the back of the parking lot on the app with no indication that the prices had changed.
There's more at the link.
Let's be honest: most companies are out to separate you from as much of your money as possible, as painlessly as possible. It's only because we aren't vigilant, and don't pay enough attention to what's going on, that we continue to tolerate this.
What's more, many of the prices charged for goods bear no relation whatsoever to the actual cost of production of those goods - another con game. To illustrate, when I did my Masters degree in management, I recall our class visited a clothing factory. A production line was churning out identical women's dresses. At the end of the line, the last thing to be done before they were packed and shipped out was to sew a label into the neckline. The dresses - all identical, remember, using the same materials and coming off the same production line - were shunted onto five "label rows". The first - very few dresses - got an upmarket label, destined for high-end boutiques. The second - a few more dresses - got a less upmarket label, but nevertheless one with "snob appeal". They'd go to the "better" department stores. The next three lines - the majority of the dresses - received middle-class to lower-class labels, and were destined for mass-market clothing stores and major supermarkets, where dozens of them would be hung on racks to be pawed through by all and sundry. The prices charged for the high-end label would be twenty or more times higher than for the lowest-level label, but the dresses were identical. It was "con the consumer" from beginning to end.
The Target app referred to above is simply another version of the same principle. Charge what the market will bear, and deceive the consumer into paying the highest possible price. The concepts of fairness, equity and value for money are irrelevant, as far as most sellers today are concerned. As for openness and honesty . . . fuggetaboutit!
What's the best counter to this naked greed? I think Charles Hugh Smith's advice on frugality is very apposite. If we give as little of our money as possible to these companies, they'll be forced to reconsider their tactics. As long as we tolerate their antics, they have no reason to change them.
Peter
I was about to say something snarky about price-value relationships in women's clothing when something whispered "basketball shoes."
ReplyDeletePerfect freaking answer!
DeleteIsn't the definition of being an adult the ability to examine information and make good decisions based on the information? If you know that Item A is the same as Item B and is priced less, and it meets the need you have for it, why would you not purchase Item A, or at least forego buying B? The work of being an informed consumer is on the consumer. When did it become the job of a company to make decisions for you or me?
ReplyDeleteNow, outright fraud is another thing altogether. If A is sold as capable of performing a job and it comes no where near that capability, and the company will not stand behind the quality of that product with a guarantee, that becomes a con game, becomes thievery. Adults make every effort to learn the appropriate lesson then.
Company DRMSPQLCZXU is welcome to sell their product or service for whatever they wish. It is my job to decide what that product or service is worth. As long as the price on the shelf or the box is the same at the register, or checkout page on the net, they have dealt fairly with me.
Nobody has any business in a Target store anyway, IMHO.
Consumer prices aren't supposed to be based on cost of production, but cost of production plus profit. Profit is all the traffic will bear.
ReplyDeleteChanging the prices based on location is not just sneaky, but deceptive. It smacks of violating "red line" laws.
Why would anybody willingly go to a Target store? Who wants to support leftist pedophiles?
The other point that is disturbing is that Target is apparently tracking your location in real-time, and its' app displays the price because Target "knows" where you are.
ReplyDeleteI could very easily see that capability used to track you thru other stores, and "see" what you looked at/purchased, so Target can better tailor its' ads & prices for you.
Peter, as McChuck said, the price of a thing or a service and its cost of production are entirely separate things, from a moral point of view. The price will be based on the value of the item or service to the buyer. If the cost of production is higher than that, the supplier will find some other way to earn a living. If it is much lower, then the supplier has done what we call "created value" and has earned his wealth.
ReplyDeleteBut the main point of your article is an excellent one. If you find some seller, usually a giant, faceless corporation, is doing business in a deceptive and dishonest way, it's a good thing to refuse to buy and publicize the fraud as widely as possible.
I saw the 'identical clothing, different labels' in person about 25 years ago. For Christmas that year, I received red terrycloth bathrobes from two different people. One had a department store label, one had a designer name label - both robes were otherwise identical. Businesses can, and should, charge what the market will bear. It's up to us to decide if the goods are worth that price.
ReplyDeleteAs for the app changing prices depending on your location (or many other factors, as it turns out), that's a good reason not to use the app but to stick with a browser that doesn't report quite as much detail to the store's web page.
In fact, thinking about it, if you really want the best price on something you're going to be buying it would be worth checking the price from different sources and pick the one where the pricing algorithms gave the best deal (e.g., you might get a lower price when browsing from an Android table instead of an iPad since the algorithm might figure that somebody willing to pay Apple prices would be willing to pay higher for what they're selling). That might be a good experiment for someone to run to figure out how to game the pricing.
I guess my question is does the Target app allow you to order items for the remote price or must you pay the inflated store price? If not then that truly is bait and switch and false advertising that deserves a complaint to your state's consumer protection division. If the app does allow you to purchase through it, then a savvy shopper would simply check the price from home and at the store and always pick the lower number.
ReplyDeleteAnother consumer trick would be to take a dated screen shot of the lower remote app price and demand that the store honor it when they ask you to pay more.
Only way to correct this sort of stuff is to bestow embarrassment, additional work, and cost on the stores involved. A few pointed inquiries from government agencies couldn't hurt either.
I have seen this in other places (Best Buy), but learned to print out the page from home first.
ReplyDeleteAlthough, I have been know to go to the store and make sure that they have what I want in stock, then go out to lunch and order it online for store pickup. It is usually ready by the time I finish lunch. And they have to add the labor of pulling it out of stock and bringing it up to customer service. And I don't have to wait in the checkout line.
Peter, you're supposed to be a smart, well educated fellow. Where did you get the idea that "the prices charged for goods" should somehow relate to "the actual cost of production of those goods" -- ?
ReplyDeleteNever, in the history of commerce has that ever been the case! It's a socialist idea, so easily refuted that you should be embarrassed for citing it. Supply and demand determine the prices of goods. That's Economics 101! The only relation of price to the cost of production is to set a bottom, beneath which the good in question will become unavailable.
Sheesh!
Since when does price have ANYTHING to do with cost of production?
ReplyDeleteCome on, amigo, that equivalency is right out of the socialist playbook.
@Francis W. Porretto and Josh Scandlen: It's not a socialist idea, although socialism has tried to take it over. For further details, consult the Old and New Testaments, and read what they have to say about just pricing. As a Christian and a retired pastor, I find their arguments compelling.
ReplyDelete
ReplyDeleteWhen you pay more for something in a "high end" store, you are paying for the "experience" and the ability to look down on other shoppers. Not to mention a store that likely has higher advertising and other costs it has to pay.
So, there is nothing immoral about that high end store charging more -- but, there may be something immoral about the shopper who goes there for looking for validation.
In the same vein, I've noticed that if I'm shopping at Amazon, and for anything even the slightest bit pricey, it's worth it to open an anonymous browser window, and shop through that, too.
ReplyDeleteNot every time, but often enough, you'll see a cheaper price in the anonymous window; They're serving up higher prices to Prime members to pay for the free shipping, apparently.
But get it into your cart anonymously, and then log in, in that window, and they don't (yet) update the price.
Also, NEVER just hit that "buy again" button. Because they don't necessarily complete that purchase using the cheaper source you'd originally picked, they go for the same product from someone else at a higher price.
They're convenient, but it's a war, and Amazon is NOT on your side in it.
What happens if you turn off location tracking on your phone?
ReplyDeleteAnother example I found was when I used Orbit and other sites to find cheap airfares. I looked at a price and got a quote, checked another and found a higher price. When I went back to Orbit the price was higher than before. This was in a span of three minutes. I thought that was fishy, they couldn't have sold that many tickets that the fares went up. I checked the options menu on my browser and cleaned the cookies out from the previous visit and sure enough the price went down to the original amount. They track you and determined you didn't find a better price elsewhere and then raised their prices.
ReplyDeletePeter, I'm fairly sure that practice violates state laws on requiring sales at the marked price. I know that in my retail days in the late 80s early 90s, if we changed prices on a bunch of items and missed one, we had to sell it at the marked price, at least in AL.
ReplyDeleteOn the other hand, consumers who pay extra for upscale labels get what they pay for: the label. The problem, if there is one, is not the manufacturers or retailers.
ReplyDeleteDid you try turning location data off? It is only in the past week or so that I learned Amazon and other retailers changed prices on the fly. Now it is Target. I wonder what Target would say if you took a screen grab at the back of parking lot and carried it inside.
ReplyDeleteActually "Bayou Renaissance Man" you are wrong in assuming that "What's more, many of the prices charged for goods bear no relation whatsoever to the actual cost of production of those goods" is " another con game."
ReplyDeleteIt is not a com because a) Goods don't list production cost b) Pricing is not solely dependent on production costs c) price discrimination (some customers charged more who value something more) and most importantly c) The same exact thing can be a different economic good depending on factors other than production costs.
I had a friend whp used to bitch how the onion farmers in Florida, NY were cheated because the got five cents per onion and stores were charging a dollar. The same exact onion has a different price depending on other factors like where it is, whether it is washed and sorted, how long it is stored, etc. An just picked in season onion way out in the boondocks being sold at the farmstand is a completely different economic good than another in the city grocery store in the spring close to other cooking ingredients. Yes, twenty times as valuable a good, or more.
Brian, quit being a know-it-all. The economy has plenty of examples of goods with value pricing (based on perceived value to the consumer) rather than marginal pricing (based on cost of acquisition plus a percentage). And it is perfectly reasonable to describe pricing for cars, airline seats, luxury goods, or anything where the seller is trying to maximize margins versus the individual consumer versus selling at a fixed price to the public as a con game. Target's underhanded efforts to join the ranks of value-priced sellers is an excellent example.
ReplyDelete"What's more, many of the prices charged for goods bear no relation whatsoever to the actual cost of production of those goods - another con game. "
ReplyDeleteKarl Marx sort of said the same thing....
Day one of Marketing 101, the professor's first statement to us was "if you don't get anything else out of this course you need to understand this one thing - price has nothing whatsoever to do with cost."
ReplyDeleteTo illustrate, when I did my Masters degree in management, I recall our class visited a clothing factory. A production line was churning out identical women's dresses. At the end of the line, the last thing to be done before they were packed and shipped out was to sew a label into the neckline. The dresses - all identical, remember, using the same materials and coming off the same production line - were shunted onto five "label rows".
ReplyDeleteI've got a little experience with this in clothes-- more with apples, though it's all second hand-- and while I don't know if they were doing this at the factory you were at, the ones I knew would do something that LOOKED like that, but was actually quality sorting-- absolutely perfect at the top, serviceable but has issues at the bottom.
As I understand it, the "factory outlet" thing came after they started shipping production over seas, where they really aren't that good at sorting-by-quality, so you just make it all the same and sell the stuff as factory outlet brand name.
"What's more, many of the prices charged for goods bear no relation whatsoever to the actual cost of production of those goods - another con game. "
ReplyDeleteKarl Marx sort of said the same thing....
Karl Marx was setting up a heresy of Christian charity, turning it into a robotic system as different from the original as rape is from love. 'From each according to his ability, to each according to his need' is evil when strip away love in the willing-of-the-best-for-the-other sense, and make a hugely abused system that DEMANDS perfect angels for subjects and slaughters any who fall short.
That doesn't mean that a family, where everyone does what they can and each gets what they need, is evil. Same way murderous psychos screaming "GOD IS GREAT" does not mean God is NOT great, it just means they're evil.
You are looking at the high-priced labels and thinking the rich people got ripped off; I'm looking at the low-priced labels and thinking the poor people got a good deal. The manufacturer could only sell the dresses at the cheapest price because they were selling others at higher prices. There are also the differences in shopping experience between the high-end and low-end stores, and the label is a part of that shopping experience.
ReplyDeleteAs to the added in-store pricing, that's just advertising. Target is willing to give up a certain amount to get people in the store. Or maybe they are willing to give up a certain amount to go mail-order and avoid the costs of managing a shopping floor.
The lack of openness in these situations is troubling because unlike opportunistic pricing, dishonesty in marketing is wrong. But you have to be pretty careful about the difference between lying and just not revealing things that you are not obligated to reveal.
So. You have some evidence that a single company may be playing bait & switch games.
ReplyDeleteDo you have any evidence that other companies do this? None was presented in the article.
I've shopped via apps and have found the advertised prices match the actual in store prices, including Best Buy, Walmart, and Microcenter.
@Casey: You said: "Do you have any evidence that other companies do this? None was presented in the article."
ReplyDeleteOn the contrary: evidence was presented in the article. I linked to a 2005 report that cited several examples, and there are plenty more out there, as a simple Internet search will reveal.
Why is this controversial at all? They're not obligated to offer for the same price in every store and online. When you arrive at the store, they start informing you of the price you'll pay at the register. I'd prefer to have that heads-up. Is the complaint that Target doesn't match online pricing as consistently as other retailers? I don't get it.
ReplyDeleteIt’s a trust issue, and Target is abusing it. And costing their credibility.
ReplyDelete