Is this business acting illegally?

Banner_Stands

Hi,

I received an enquiry last week from a prospective customer who asked me to match a price on a banner stand offered by a competitor.

As part of our own companies policy we will always try to beat any like for like quote and so I asked the customer to provide a link to the advertised product (which they duly did).

Later in the day I re-visited the website again as I wished to show the product to a colleague but the price on the item had increased by almost 250%.

After much hunting I realised that the company concerned are actually advertising the product at a far lower price but only through an Adwords link.

In other words, the company are capitalising on existing customers who probably re-visit/re-order from their website by ripping them off at £89 for the product (advertised on sale) whereas unbeknown to those customers, they could be paying £35 for the same thing if they found the same website through adwords.

I know that this practice is morally dubious at best but I wonder if it is actually fraudulent or illegal.

The reason I want to know is because our price guarantee applies to other openly advertised products on competitors websites. As this product is 'hidden' from all but adwords visitors, I am not sure if it could be considered openly advertised since there is nowhere to find the product through the companies main website.

bod1467

A company can sell its product for whatever a customer is wiling to pay. And they can sell to different customers at different prices if they want.

Nothing illegal, but it's a policy that may well cause them to shoot themselves in the foot if it becomes more widely-known about.

Hintza

They can advertise wherever and however at whatever price they want as long as you can actually buy it at the advertised price (whether they keep customers for long is debatable).

You probably need to think about putting in a caveat in your "price match" T&Cs if you feel they are not genuine.

earthstorm

Banner_Stands wrote: »

After much hunting I realised that the company concerned are actually advertising the product at a far lower price but only through an Adwords link.

In other words, the company are capitalising on existing customers who probably re-visit/re-order from their website by ripping them off at £89 for the product (advertised on sale) whereas unbeknown to those customers, they could be paying £35 for the same thing if they found the same website through adwords.

to me its called an advertised discount

ie. they list as full retail price on their website, but if you use a discount voucher (adwords) you will get it as a discounted price.
Guess what! This is a common practice in the world of retail. nothing illegal about this.

I would say Price Match should be on the full retail price and not a discounted price.

Hintza

earthstorm wrote: »

I would say Price Match should be on the full retail price and not a discounted price.

There really isn't a proper RRP these days, but a business has to guard against price matching at a loss.

Banner_Stands

Hi all,

Thanks for your replies and advice.

I can understand why the company in question have the pricing they do (so they can exploit existing customers) whilst still attracting new ones.

The whole policy just stinks from a moral perspective and I think that when some of their established customers cotton-on they will be very upset and disgruntled.

Thanks again!

earthstorm

Hintza wrote: »

There really isn't a proper RRP these days, but a business has to guard against price matching at a loss.

RRP is what the manufacturer suggest is a reasonable selling price and has nothing to do with what a retailer charges.

A example is i recently purchased some toys ready for the xmas from one of my wholesalers it cost me £6.99+VAT (£8.39) but they state a RRP of £8.49. so if i was to sell at RRP i would be making a lose.
Price Match works on a like for like product at the advertised FULL price before any discounts and is usually to PM within an certain distance from the store.

agrinnall

It doesn't seem very different to insurance companies selling a policy at a lower price to new customers than that charged for a renewal - annoying, but caveat emptor, and shop around.

earthstorm

agrinnall wrote: »

It doesn't seem very different to insurance companies selling a policy at a lower price to new customers than that charged for a renewal.

Tell me about it, my van insurance renewal arrive and nearly £100 increase ( no claims etc.) so could not figure out why such and increase and even over the phone they could not explain and they could not get me it cheaper.

So went online and used gocompare and i got the same cover with the same insurance as i already have £30 cheaper than my last premium all for saying i was a new customer.

It seems these days loyal customers mean nothing

bod1467

earthstorm wrote: »

It seems these days loyal customers mean nothing

These days? It's been like this for years!

earthstorm

bod1467 wrote: »

These days? It's been like this for years!

yes i know, but i commented it in present context