Federal Judge Slams Best Buy In Price Match Ruling

A federal judge last week (March 19) slammed Best Buy on price match issues and allowed a class action lawsuit against the chain to proceed.

One of the most interesting exchanges in the case was an internal document from Oct. 19, 2006, from Phil Britton, who Best Buy had identified as "a member of Best Buy's competitive strategies group." In the memo, Britton said that the chain disregards its own policies. "What is the first thing we do when a customer comes in to our humble box brandishing a competitor's ad asking for a price match? We attempt to build a case against the price match. Trust me, I've done it, too. Let's walk through the 'Refused Price Match Greatest Hits.' Not same model? Not in stock at the competitor? Do we have a free widget with purchase? Is it from a warehouse club? They have membership fees, you know. Limited quantities? That competitor is across town? We've got financing. Is it an Internet price? It's below cost."

In a deposition, Best Buy officials tried to blunt the significance of that memo by testifying—and I couldn't make this up—that the employee was just kidding. U.S. District Court Judge Colleen McMahon seemed to not find their explanation amusing.

"Best Buy's explanation for this document—and its blatant attempt to minimize the clear import of Britton's statement—is that Britton 'is a long-standing employee with a sense of humor, so whatever he said about "greatest hits," he's got a sense of humor to make things—one of our—our values is having fun while being the best and he does embrace that.'" The judge then offered a one-sentence comment: "The plausibility of this explanation will be for a jury to decide."

Testimony indicated that Best Buy officials would discourage—if not outright forbid—price matches to be done if the margin was insufficient. The chain also supposedly used restocking charges to strongly dissuade consumers from trying to use the price match program.

"Best Buy's own records reveal that the price match guarantee was applied inconsistently and that 60 percent of customer requests to match warehouse club prices are wrongly denied," McMahon said in her decision.

The judge ruled against Best Buy on just about every legal argument raised. For example, one of the Best Buy defenses was that an insufficient number of accusations could be made against them. Another argument tried to attack one of the witnesses against them."Best Buy argues that Ortiz's declaration is inadmissible hearsay and should be rejected. (Best Buy) is mistaken. Ortiz's testimony is not hearsay. Ortiz testifies about his own experience as a Best Buy supervisor, his interactions with other Best Buy employees and what he was taught and told by his superiors."

In another example, McMahon talks about Best Buy's opposition to one of the plaintiffs' case, on the rationale that his product didn't qualify for the price match. Said the judge: "This argument is without any merit. As the plaintiff points out, there is a certain amount of irony in the fact that the defendant continues to try to deny that plaintiff had a valid price match despite being confronted with undisputed evidence to the contrary. As plaintiff puts it, 'Best Buy's anti-price match policy is so engrained at a corporate level that, even through counsel, they attempt to build a case against the price match.'"

In a footnote, the judge was even more blunt: "Either a person met the objective criteria for a price match or he did not. Best Buy's policy does not say that even when a customer meets all of the publicly-stated price match requirements, he may be denied a price match for some 'other' unstated reason. Best Buy's attempt to introduce this type of subjective inquiry into the class smacks of the exact type of gamesmanship that is at the heart of the plaintiff's lawsuit."