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Best Buy's Self-Destructive Online Price-Match Program

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Target and Best Buy this week made some major—and long overdue—price-match changes and finally agreed to match some online prices. But Best Buy seems to have forgotten why price matches can attract shoppers. One element of its plan, for example, says that store associates will have discretion to match or to not match online prices.

Yeah, that's the type of motivational shopper message Best Buy wants to send out: "Come on over to Best Buy for the holidays. And if our sales reps feel like matching your Amazon.com price, they will. Trust us."

The motivational value of price matching is rooted in its certainty. You can have as many published limits as you'd like (and, yes, both chains have certainly done their lawyers proud with impressive limits of every type). But the point is that a customer who brings in a rival's price that meets those limits will absolutely get that price. To have a price-match program be based on the whims and discretion of the sales associate is hardly effective. Do it or don't do it, but make it firm either way.

Best Buy spokesperson Amy von Walter said associates will match online prices, but not all the time. "All things being equal, if the price is the obstacle to the customer making the purchase," von Walter said, it will likely be matched "when it makes sense," adding that the decision will not be made by store management but by "discretion at the associate level."

It seems highly unlikely that store managers would not have a huge say in these decisions, setting limits for how far associates can go. So although it might technically be true that associates might officially make the call (and that, in and of itself, may not pass the raised eyebrow test), it would certainly be because of guidelines set by the store. Would a store manager really want better deals offered to shoppers depending on which associate they worked with?

One interesting possibility is that Best Buy is being clever with its "associate discretion" effort. If the chain publicizes the program saying that price match is at the associate's discretion and then confidentially tells all the associates to OK every online price match, the price-match customers feel like they got something other people maybe didn't. (OK, not bloody likely. We shouldn't ever let optimism replace our instinct for cynicism.)

Another shopper perception is the exclusion of Amazon third-party sellers. As a practical matter, those third-party sellers do offer much lower prices (sometimes), and they do not offer all of the services and protections of buying directly from Amazon. Hence, excluding them from a price-match program is reasonable.

But the way Amazon handles those third-parties makes them often look extremely similar to direct Amazon offers. If a shopper goes to amazon.com and searches for a microwave oven, finds one she likes and orders it, that shopper may not even realize it's from a third-party. That means the customer may walk into Best Buy thinking it will be price matched and will then be disappointed. There's no easy fix for this, other than customer education, which makes no sense here. (You really want Best Buy to teach its customers about how to shop at Amazon? That's taking good retail corporate citizenship a bit far.)Best Buy is only offering these online price matches for "new, identical, immediately available current pre-tax appliance and electronics hardware products prices." That's quite a mouthful of limits, but it's then restricted further to 20 sites: amazon.com, apple.com, bhphotovideo.com, buy.com, circuitcity.com, compUSA.com, crutchfield.com, dell.com, hhgregg.com, hp.com, homedepot.com, lowes.com, newegg.com, officedepot.com, officemax.com, sears.com, staples.com, target.com, tigerdirect.com and walmart.com.

It gets better. When buying electronics hardware, what's the best thing to exclude to really sour any potential customers? Yep: All accessories are excluded. And the online price matches are halted from November 18 through November 26, a Scrooge-like move that even Target didn't feel the need to do. (Target's online price matching will run non-stop from November 1 through December 24.)

Despite the Scrooge quip, this Best Buy move isn't one to be criticized for cheapness. It's to be criticized for being one that will hurt Best Buy sales—or at least undermine its efforts to boost sales. Black Friday is November 23 this year and Cyber Monday is November 26. Those are the days when e-tailers will do some serious damage to physical stores. If you've made the wise and long overdue decision to match online prices, why give online retailers free reign during those critical days? Heck, that's when your price matches should be the most aggressive, to give shoppers a reason to come in and fight the crowds. (In New Jersey malls, "fight the crowds" is taken seriously. Some armed assailants have commented afterward, "You mean I could have bought stuff, too? Who knew?")

On the plus side, bestbuy.com is offering free shipping on all products during the holiday season.

Target's online price-match program gets deserved kudos for its almost complete holiday duration (November 1—December 24). It has published the names of only four "qualifying online retailers"—amazon.com, walmart.com, bestbuy.com and toysrus.com—but there might be quite a few more. Why don't we know? That's one of the Target problems.

The retailer announced its online price program on Wednesday (Oct. 17), but its CEO had told a news conference about it a few days earlier. Any shoppers who went to target.com to read the details would have been confused, because the site was still excluding all online prices from being matched. The reason is that Target said it wouldn't publish the details of the program until October 22. This seems odd. It's not as though Target is not publishing the details until the program goes live on November 1. And if the company felt the need to announce on October 17, why not release the full details then? We wonder if the full details are unpleasant and, this way, the good stories come out and no one thinks to do a follow-up when the Target specs materialize. (Fear not. We won't forget.)