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| Version 1 | Version 2 |
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| Some Online Bargains May Only Look Like One | |
| (about 3 hours later) | |
| Amazon has some unbelievable bargains on its virtual shelves. | Amazon has some unbelievable bargains on its virtual shelves. |
| A cat litter pan with a list price of $2,159 can be yours for a mere $28. A bag of doggy treats, normally $822, is only $8. A windshield wiper blade, which the unwary pay $1,504 for, has been knocked down 99 percent. | A cat litter pan with a list price of $2,159 can be yours for a mere $28. A bag of doggy treats, normally $822, is only $8. A windshield wiper blade, which the unwary pay $1,504 for, has been knocked down 99 percent. |
| You say you don’t believe that a plastic cat pan could ever have been sold to anyone for a couple of thousand bucks? Or that a six-ounce bag of Zuke’s Lil’ Links pork and apple sausage bits ever cost more than dinner at a five-star restaurant? | You say you don’t believe that a plastic cat pan could ever have been sold to anyone for a couple of thousand bucks? Or that a six-ounce bag of Zuke’s Lil’ Links pork and apple sausage bits ever cost more than dinner at a five-star restaurant? |
| It’s all part of the bizarre world of Internet “discounts,” which let retailers and brands assert that you are getting a stupendous deal because someone somewhere else — exactly where is never explained — is being charged much more. | It’s all part of the bizarre world of Internet “discounts,” which let retailers and brands assert that you are getting a stupendous deal because someone somewhere else — exactly where is never explained — is being charged much more. |
| The root of some of these so-called discounts is a phenomenon known as list price (also known as manufacturer’s suggested retail price, or M.S.R.P., and by various other names), which The New York Times documented in a recent article. List price is a largely fictitious concept, promoted by the brand or manufacturer and adopted by the retailer to compel the customer into pushing the buy button. | |
| So if you are the sort of consumer who cares about such things, how can you guard against such pressure? When does e-commerce deliver on low prices, and when is it merely coasting on its reputation? | So if you are the sort of consumer who cares about such things, how can you guard against such pressure? When does e-commerce deliver on low prices, and when is it merely coasting on its reputation? |
| These are particularly significant issues now, as Internet retail shifts from being mostly about price to being largely about convenience. That will make it much harder for customers to judge independently if they are getting a deal or merely being encouraged to think so. | These are particularly significant issues now, as Internet retail shifts from being mostly about price to being largely about convenience. That will make it much harder for customers to judge independently if they are getting a deal or merely being encouraged to think so. |
| First, realize that the problem is at least as pervasive online as offline — and even less regulated. California, which has relatively strict laws about deceptive advertising, brought a successful case against Overstock.com for illusory discounts. But authorities elsewhere seem to have little interest. | First, realize that the problem is at least as pervasive online as offline — and even less regulated. California, which has relatively strict laws about deceptive advertising, brought a successful case against Overstock.com for illusory discounts. But authorities elsewhere seem to have little interest. |
| Over the last month, more research has been done on the shadowy world of Internet discounts that underline how random or even whimsical list prices are. | Over the last month, more research has been done on the shadowy world of Internet discounts that underline how random or even whimsical list prices are. |
| Boomerang Commerce, a retail analytics firm, compared the list prices of dozens of pet items on Amazon and the specialist pet site Chewy.com. In only a handful of cases did the retailers even agree on what the list price was. So a 22-pound bag of Blue Buffalo Basics Limited Ingredient Grain-Free Duck and Potato dog food had a list price of $131 on Amazon and $84 on Chewy. Yet the retail price at both sites was the same: $49.49. | Boomerang Commerce, a retail analytics firm, compared the list prices of dozens of pet items on Amazon and the specialist pet site Chewy.com. In only a handful of cases did the retailers even agree on what the list price was. So a 22-pound bag of Blue Buffalo Basics Limited Ingredient Grain-Free Duck and Potato dog food had a list price of $131 on Amazon and $84 on Chewy. Yet the retail price at both sites was the same: $49.49. |
| “A perceived deeper discount creates a higher conversion event — in other words, more buyers,” said Boomerang’s chief executive, Guru Hariharan, who previously worked at Amazon. | “A perceived deeper discount creates a higher conversion event — in other words, more buyers,” said Boomerang’s chief executive, Guru Hariharan, who previously worked at Amazon. |
| Blue Buffalo declined to comment and Chewy did not respond to messages seeking comment. Amazon removed the $131 list price for the dog food and the 99 percent deals I asked about. An Amazon spokesman, Craig Berman, declined to answer any questions. | |
| Another consultant, Ripen eCommerce, analyzed 746,000 product searches on Amazon. Ripen’s goal was to help third-party clients who sell on the giant retailer jockey for a better position — say, on the first page of results rather than further back. | |
| A little over 44 percent of the products — some sold directly by Amazon, others by third parties — were billed as discounted, Ripen said. “It’s less than I expected, actually,” said Dave Rekuc, Ripen’s director of marketing. “Considering you can basically name your own list price.” | A little over 44 percent of the products — some sold directly by Amazon, others by third parties — were billed as discounted, Ripen said. “It’s less than I expected, actually,” said Dave Rekuc, Ripen’s director of marketing. “Considering you can basically name your own list price.” |
| Vendors enter the list price into their Amazon data, which makes the system a self-regulating one, Mr. Rekuc said. That apparently explains deals like the one for a G.E. cordless phone battery sold by an outfit called Sale Stores and shipped by Amazon. The product page offered to knock $829 off the list price, proclaiming “You save 100 percent.” | Vendors enter the list price into their Amazon data, which makes the system a self-regulating one, Mr. Rekuc said. That apparently explains deals like the one for a G.E. cordless phone battery sold by an outfit called Sale Stores and shipped by Amazon. The product page offered to knock $829 off the list price, proclaiming “You save 100 percent.” |
| Some e-commerce experts said nothing needed to be done about illusory discounts, because the merchants needed them so much. | Some e-commerce experts said nothing needed to be done about illusory discounts, because the merchants needed them so much. |
| The process “can seem dishonest to consumers, but let’s consider the retailer’s side,” said Daniel Green of CamelCamelCamel.com, an oddly named but useful site that tracks Amazon prices. “If they weren’t using the list price as the benchmark, what would they use?” | |
| Retailers could choose the most recent price as the comparison, Mr. Green said, but then “they would just jack the price way up before the sale. I’m not sure there’s a good solution here, particularly as consumers apparently respond to large M.S.R.P.-based discounts.” | Retailers could choose the most recent price as the comparison, Mr. Green said, but then “they would just jack the price way up before the sale. I’m not sure there’s a good solution here, particularly as consumers apparently respond to large M.S.R.P.-based discounts.” |
| A few retailers defended themselves in off-the-record conversations by saying there are no victims here. That view got support from a Massachusetts judge in February, who dismissed a case alleging the use of fictitious prices by Kohl’s. | A few retailers defended themselves in off-the-record conversations by saying there are no victims here. That view got support from a Massachusetts judge in February, who dismissed a case alleging the use of fictitious prices by Kohl’s. |
| “The fact that plaintiff may have been manipulated into purchasing the items because she believed she was getting a bargain does not necessarily mean she suffered economic harm,” United States District Judge F. Dennis Saylor IV wrote. | “The fact that plaintiff may have been manipulated into purchasing the items because she believed she was getting a bargain does not necessarily mean she suffered economic harm,” United States District Judge F. Dennis Saylor IV wrote. |
| For others, however, e-commerce is not living up to its promise of being transparent and pro-consumer. | For others, however, e-commerce is not living up to its promise of being transparent and pro-consumer. |
| “Ask any consumer: ‘Would you like to be manipulated into purchasing anything you would not otherwise buy?’” said Bonnie Patten, executive director of TruthinAdvertising.org. “My guess is the answer would be no.” | |
| Her site tracks litigation against the retailers. Wayfair, an online furniture retailer, has been sued in a pricing case that is pending. A case against Amazon faltered because its customers waived their rights to sue in favor of arbitration. | Her site tracks litigation against the retailers. Wayfair, an online furniture retailer, has been sued in a pricing case that is pending. A case against Amazon faltered because its customers waived their rights to sue in favor of arbitration. |
| Perhaps the only real consumer safeguard is to laboriously compare prices. Say, for example, you have plans to tidy up the yard. Worx has a well-regarded combination blower-mulcher. Amazon sells it for $108.39, a 39 percent discount from the list price of $178. Plugging the model into Google, however, yields a range of offers similar to Amazon’s retail price. The cheapest, as it happens, was from Worx itself, whose price has recently alternated between $90 and $100. | Perhaps the only real consumer safeguard is to laboriously compare prices. Say, for example, you have plans to tidy up the yard. Worx has a well-regarded combination blower-mulcher. Amazon sells it for $108.39, a 39 percent discount from the list price of $178. Plugging the model into Google, however, yields a range of offers similar to Amazon’s retail price. The cheapest, as it happens, was from Worx itself, whose price has recently alternated between $90 and $100. |
| E-commerce is in flux. The selling point is increasingly getting something now rather than getting it cheap. Online shoppers are encouraged to live in an ecosystem where they buy as much as possible from one company. The pioneer of this, of course, is Amazon, with its annual Prime fee that covers shipping. | |
| In an ecosystem, prices are much harder to calculate, or perhaps even impossible. Customers have to trust the retailer, a problematic situation. | In an ecosystem, prices are much harder to calculate, or perhaps even impossible. Customers have to trust the retailer, a problematic situation. |
| “Pricing can be complex,” said Mr. Hariharan of Boomerang Commerce. “In some places it’s highly transparent. But there are others where you have to do the math. You have to check the impact of shipping costs, promotions, coupons and loyalty rewards.” | “Pricing can be complex,” said Mr. Hariharan of Boomerang Commerce. “In some places it’s highly transparent. But there are others where you have to do the math. You have to check the impact of shipping costs, promotions, coupons and loyalty rewards.” |
| Some consumers feel manipulated. Charlie Allenson, a New Yorker who teaches business skills using improv comedy, was recently shopping for an audio interface that would turn his computer into a recording studio. | Some consumers feel manipulated. Charlie Allenson, a New Yorker who teaches business skills using improv comedy, was recently shopping for an audio interface that would turn his computer into a recording studio. |
| On one e-commerce site, the list price was $170. At another, it was more. At a third, it was much less. | On one e-commerce site, the list price was $170. At another, it was more. At a third, it was much less. |
| “I felt like someone was playing three-card monte with me,” Mr. Allenson said. “There’s a dishonesty factor with all those different list prices.” | “I felt like someone was playing three-card monte with me,” Mr. Allenson said. “There’s a dishonesty factor with all those different list prices.” |
| Even though the final sale price was exactly the same — $100 — he did not buy any of them. | Even though the final sale price was exactly the same — $100 — he did not buy any of them. |