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Amazon Just Got Slapped With a $1 Million Fine For Misleading Pricing (recode.net)
Some deals are too good to be true. And, for Amazon, they will cost the company. From a report on Recode: A Canadian enforcement agency announced today that Amazon Canada will pay a $1 million fine for what could be construed as misleading pricing practices. The investigation centered on the practice of Amazon displaying its prices compared to higher "list prices" -- suggested manufacturer prices (MSRPs) designed as marketing gimmicks to make people think they are getting a deal, even though it's often the case that no shopper ever pays that price. "The Bureau's investigation concluded that these claims created the impression that prices for items offered on www.amazon.ca were lower than prevailing market prices," Canada's Competition Bureau said in a statement. "The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate."
As long as people value the ephemeral bargain of the markdown, instead of the actual product value, this retail trick will never die.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
Canada's Competition Bureau said in a statement. "The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate."
If that's the price the suppliers are giving them, why wouldn't it be accurate? Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations. Heck, there are even sites that will do the comparisons for you. Likewise, nobody ever pays MSRP on anything anyway; this sounds like a bogus complaint to me.
Taking guns away from the 99% gives the 1% 100% of the power.
Uh...you broke Law 365, section A, code D! Now we get a million dollars! Muahahahah
Laugh all you want, but there is a bit of validity to the complaint.
If you compare Amazon.com (US) to Amazon.ca (Canada) you will see that Amazon.com is like a superstore, with tons of choices and multiple price points for new, used, refurb, etc., and Amazon.ca is like your corner convenience store, you're lucky if you have one choice and it may or may not be marked up higher than retail. Yes, consumers should comparison shop but it could be confusing for less experience online shoppers.
So brick and mortar stores do this ALL THE TIME.... they never cared. But Amazon does it. BAM!
This is also illegal in Canada and stores get fined for it as well up here. Maybe you're in the US, where consumer protections end where corporate rights start. Doesn't work that way up here though. It's the same reason why when you buy something on Steam in Canada, it's considered an owned product not a license.
Om, nomnomnom...
I
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
but how is the retailer supposed to know the manufacturer/supplier has them "inflated". Are they supposed to go all-Sherlock for each item they sell?
You want to claim that you are cheaper than marked price, then you need to do the research!
:)
You can't just make arbitrary claims like that without anything to back such a claim. That is misleading pricing.
Honestly, there are so many common practices today that is fraudulent, if consumer protection agencies were to get aggressive about enforcing current regulation they have the power to change many things.
Note: just because a fraudulent practice is both common and suspected by must customers doesn't make it any less fraudulent. This is similar to mileage inflation scandal, it was common practice, consumers knew they wouldn't get the advertised milage, but that didn't make it any less illegal
They could just read the relevant sections of the Competition Act. The criteria used to determine an ordinary price are clearly stated there.
This is a pretty common requirement in the western world. The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price.
In the UK (and most of Europe) for example, all price cuts must be advertised as being cut from a different price that you have sold the item at for a continuous 30 day period.
If that's the price the suppliers are giving them, why wouldn't it be accurate? Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations. Heck, there are even sites that will do the comparisons for you. Likewise, nobody ever pays MSRP on anything anyway; this sounds like a bogus complaint to me.
You are wrong. People rely on this information, which is why it is useful to do it. Amazon could and should easily show what the model normally sells for, but they only have an incentive to do it if forced to by regulation. Like how supermarkets should show price per unit even though anyone can do math if they take the time. In real life, you occasionally need regulation in order to incentivize behavior which is useful for society even though it hurts the person who does it. Otherwise you have lots of fraud, contracts are unenforceable, the economy becomes a whole lot less efficient, etc...
A lot of government regulations are implemented badly, and some are bad ideas, and there are too many--but there are really good reasons for some government actions.
Real lawyers write in C++
I didn't realize Kroger and Publix were operating in Canada... /sarcasm
Canada is a different country, with different laws. Just because your experience is one thing, doesn't mean it's the same everywhere.
If that's the price the suppliers are giving them, why wouldn't it be accurate?
Because it is nothing more than a suggestion from the supplier. It has no actual relationship to real market value.
Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations.
So according to you fraud is ok because nobody *has* to buy from Amazon? Weird argument you have there. Sorry but retailers shouldn't get to make any and all claims about their product regardless of veracity. This includes lying about the "market" value of the product to make it seem like it is a better deal than it actually is.
"The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price."
That's called deceptive pricing and we most certainly do have laws and court cases dealing with exactly this in the USA, courtesy of the FTC.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
The other common thing they do is alternate two sales -
Oranges, £0.49 –SALE, 3 for 2!
Oranges, SALE £0.33 was £0.49
Each for 30 days.
>> In the UK (and most of Europe) for example, all price cuts must be advertised as being cut from a different price that you have sold the item at for a continuous 30 day period.
In parts of the US, this is illegal. For example, there's a California law on this:
http://money.cnn.com/2016/12/09/pf/price-scheme-jcpenney-kohls-sears-macys/
My mum bought 4 beigels for 25p each, and the girl tried to charge her £1.40. My mum (who used to be a programmer, and can probably add octal in her head faster than a bakery worker could count bread rolls) said "No. 4 times 25p is £1." The girl responded by bringing out a piece of paper and a biro and wrote on in 25p + 25p + 25p + 25p = £1.40 and then said "see figures can't lie!" My mum said "Ok, just give me one beigel" and handed over 25p. Then she said "OK, give me another one" another 25p handed over. Process repeated until my mum had 4 beigels and the girl had £1. - problem solved (and queue of potential customers dispersed).
If you are not good with mental arithmetic, don't ever buy more than one item in East London. And make sure the items scanned in the supermarket are the items that you actually take home with you. It is a regular event to buy two of something and find the till receipt mysteriously shows three of them. (and the shop WILL blame the Mysterons for it).
Tell the above to your kids and explain "that is why you have to study maths at school".
And tell the appropriate idiot at /. that £ is the symbol for GBP and not $AU or WTF.
Sent from my ASR33 using ASCII
But in this case, the consumer has all the pricing information right at their fingertips. You can track almost any product's price history with CamelCamelCamel. Too much work to click a button? Use Wikibuy instead, which will pester you with a pop-up whenever you browse an item with a lower price elsewhere. In 2017, do I really need to mention PriceGrabber or NexTag? Hell, even Google links you to their own price comparison service nearly every time you search.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
A free market that actually delivers on the promises of a free market DOES require perfect information. Otherwise it devolves into a race to the bottom where all you can buy is crap.
Which is exactly why Free Markets will never exist. You can never have the information you need.
Economic information theory teaches that information has a value and a cost. You can have the information you need, but it costs something. In this case it would cost time to compare.
Canadian brick and mortar stores have a LOT of lobbying clout, and they HATE online merchants. Take a look at the argument over raising the amount you are allowed to import duty free. Lowest value in the developed world, by a HUGE margin, and no change in sight, all thanks to brick and mortar lobbying.
Of course it's a Canadian tradition, why compete when you can lobby? That's why we pay much more for almost everything than most other countries (possible exception being Australia, they seem to get gouged almost as badly as we do)
How would it not? The whole premise of the free market is based on the buyer being able to determine tha value proposition of the offer. You can't do that when durability isn't apparent. For a while, brand made a decent(ish) proxy for that, but now most brands are just a shell around the no-name chassis used by multiple brands.
For example, 2 widgets priced at $30 and $35. The $30 one is made of substandard parts and will fail in a year. If the $35 one is made with quality parts, it will last 5-10 years. Simple choice. However, in the real world there's also the $40 one which is the same chassis as the $30 one but with a 'better' branding on the shell. There's also the $50 one that used to be made with high end components and would last a lifetime, but last year it switched to mid-grade parts and will last about 4 years.
If you don't have perfect information, you can only choose based on price so when it turns out to be crap, you lose as little as possible. So the $30 crappy one it is. No point in selling one that will last a lifetime at twice the price, nobody will believe it, so make one with the crappiest components known to man and sell at $25 if you actually want to stay in business. Every once in a while, use better components is a run so you can spread some dis-information around.
Likewise, competitive pricing for the same product only works when you know what other people are charging for the product.