Monthly Archives: July 2016

Price & the Law: e-commerce forces a review

Thought-provoking article in today’s Toronto Star (from NYT’s DavidStreitfeld) on Price & The Law.

‘Sale’ prices used to require an actual reduction vs regular prices; the mere word onsalenowliftarns-CC‘sale’ makes some consumers salivate. Now, Amazon is rethinking its ‘permanent sale’ approach; it’s selectively removing some ‘list’ or MSRP prices, against which it shows consumers their ‘savings’ or ‘sale’ discounts. Amazon’s own suppliers’ sites ( eg Breville)  and other etailers pricing practises have laid waste to ‘regular’ or ‘MSRP’ prices’ relevance.

A ‘Manufacturer’s Suggested List Price’ was always fraught with credibility and enforcement issues; the Law says a supplier can’t FORCE a customer to resell for the MSRP price. Many suppliers are initially delighted when resellers sell for less than MSRP, as long as that boosts short term unit volume more than it undermines brand value credibility &/or causes conflict? flashback with other retailers who helped the supplier by bearing the risk to carry an item first (loyalty matters!) &/or carry more overhead or expect higher unit margin, to offset what they invest in selling it (eg resellers who ‘add value’ with merchandising, displays, personal sales staff, etc).

If discounting is everywhere, though, then discounting is … no where. A sale was only a great idea for the short term, and in select situations.

UpShot? The word ‘Sale’ has lost some value; Consumer  Protection Law needs to be updated to re-set the rules on if/when a situation calls for the word ‘sale‘; or else it will be used to mislead ie especially to beguile the naive.

Steven Litt