It's says 5-ft-1. He should fit in our
server rack. No, it's starting at
5-ft-1. And here it's listed as up to 7
ft. Hold on. I found the same guy on
Amazon and it says compare at 6-ft-2.
What does that mean?
>> He's an organic match. We just want him
to fit in the server rack. Max, what are
you even talking about? No.
>> [music]
>> This type of deceptive marketing has
existed for as long as I've been 4-ft-1.
But more recently it's become an even
bigger problem. For example, just last
year bestbuy.com decided to change how
they present promotional prices. Instead
of calculating discounts compared to
their typical everyday price, or you
know, MSRP, they now use a compare at
reference price that is from what we can
tell at best optimistic and at worst an
outright lie. And the worst part is Best
Buy seems to know this given that they
haven't brought this practice to other
regions where they have stricter
regulations on this behavior. So let's
talk about how retailers are trying to
avoid pricing transparency, how this
plague is spreading, and what we can do
as consumers to push back against it.
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We'll have that linked down below.
This problem runs much deeper than just
one retailer, and we're going to get
into that later. But, I want to start
with Best Buy's recent changes. This
monitor, for instance,
>> [music]
>> is listed for $260 off compared to Best
Buy's comparable value. Compared to
what, though? At a glance, this seems to
suggest that it is compared to their
normal retail price, but
why don't we dig into the fine print
here? Oh, and dig into the fine print
here, shall we?
>> [clears throat]
>> Our comparable value prices are based on
the price at which the product or a
comparable item
Wait. The reference price can be for
another product entirely? Who decides
what's comparable? Oh, wait. Okay, hold
on. There's more. It can also be a price
that was or in the future will be
offered for sale by Best Buy marketplace
sellers, manufacturers, suppliers, or
other retailers online or in store.
Let me get this straight. Best Buy's new
policy is that it can reference the
price of any product at any time, even
in the future, sold by anyone anywhere,
and use that to calculate how much money
I'm saving? And they think that that's a
useful reference? No, of course they
don't. Why would they make this change?
The simple answer is to capitalize on
the FOMO of shoppers who might not
obsessively track prices and might not
realize that the discounts they're being
offered are kind of BS. If you want me
to illustrate why this matters and why
it needs to be stopped, I've got a
perfect example for you. lttstore.com
sometimes discounts our legendary
ratcheting multibit screwdriver. $10
off, though, doesn't sound like that big
of a deal. But, hold on a second. What
if I compare at some other multi-bit
screwdriver from, say, Wera Tools? No,
no. Not the price on their site. How
about this one from a random seller?
NOW, look at the LTT screwdriver. What a
deal! But, wait, there's more. I think
that that Red Bull edition could
double in price in the future. Well,
now, you're saving $940
on your purchase from LTTstore.com,
which sounds ridiculous because it is.
But, if we don't do something, that's
the direction we could be headed. And
look, I fully recognize that the
slippery slope argument may be a
fallacy, but Best Buy is obviously out
there icing the hill right now. So,
isn't any of this against the law? Well,
I'm not a lawyer and this isn't legal
advice, but the short version is it
seems like it is and it seems like Best
Buy knows it. You might have noticed
that I keep using the words reference
price. And that's because reference
pricing is a common phrase used in legal
documents for what the American FTC
calls retail price comparisons. And
false reference pricing or deceptive
pricing is a practice that is regulated
by the FTC. How do I know that Best Buy
knows this? Because they've been sued
over it as recently as just last year.
That suit claimed that Best Buy enticed
shoppers with discounted prices that
would either not change after the sale
period, were not lower than the regular
price 90 days before the sale, or even
were higher than another recently
advertised price. Now, that case was
voluntarily dismissed by the plaintiffs,
but that doesn't mean that Best Buy is
in the right. It is possible that they
were right, but it's also possible that
the plaintiffs were dissuaded by the
cost of litigation, or it's possible
that Best Buy settled out of court.
I don't really consider the matter
resolved one way or the other, and
neither should you. It is worth noting,
by the way, that outside of the US, Best
Buy Canada doesn't use this language,
and that appears to be because Canada's
Competition Bureau requires retailers to
pass a certain volume or time test in
order to count something as an ordinary
selling price. Although it is worth
noting that even then, recent lawsuits
have cropped up accusing Best Buy Canada
of misrepresenting regular prices and
savings. [music]
Now, I've picked on Best Buy a lot so
far, but I promised to touch on the
others, and now it's time to do just
that because this is a widespread issue.
Walmart's reference pricing appears to
be based on the median price within 90
days offered by Walmart or its
marketplace sellers. That's a little
better, but that bit at the end, knowing
how marketplace sellers tend to price
items, that clearly gives Walmart a lot
of leeway for representing their uh
discounts. Then, of course, there is
Amazon. They do use a suggested retail
price,
>> [music]
>> which can be provided by the
manufacturer, supplier, or seller if the
reference price is labeled list price.
But if it's the typical price, like on
Walmart, that's just the 90-day median
price that customers have paid with no
real auditing or transparency from our
side to actually verify [music] it.
Now, I can continue to give examples,
but I think at this point it'd be better
to lay out what we feel needs to be
done. Starting with compare at reference
prices simply being banned or required
to be the manufacturer's advertised
MSRP. This move is unlikely to make
anything cheaper, see GPUs that
regularly retail for well above NVIDIA's
supposed MSRPs, but at least this would
give consumers the transparency to
understand what is a deal and what just
plain is not a deal. With that out of
the way, compare at, though, is just one
of the three horsemen of the deceptive
marketing apocalypse. Up to can be just
as bad. Whether it's sales where the
deeply discounted items are all garbage
or product specifications that would be
better represented as your mileage may
vary. Up to has turned into this
catch-all butt-covering clause that just
absolves manufacturers and retailers of
any responsibility for products or
offers that don't live up to their
promises. And the funny thing about it
is that guidelines around this one
totally do exist as well. They just need
to be adopted by regulatory bodies and
then enforced. The Better Business
Bureau for instance prohibits up to sale
claims where at least 10% of the items
in the sale don't meet the advertised
discount threshold. That sounds pretty
sensible to me. As for the last one,
starting at, I'm not going to get into
too much detail since we've got a whole
video dedicated to dunking on companies
for advertising an awful configuration
you shouldn't buy that gets you in the
door then upselling you something usable
often for a lot more money. So,
with the three out there, what can we do
about them?
Well, it's tough because there are cases
where these terms do make sense. Apple's
Mac mini would be a great example of a
product that is an awesome value even at
its starting at configuration. Let's
pick on ourselves again. Our own True
Spec USB-C cables are starting at
$21.99. But like Apple, I'm not going to
apologize for that product being a great
value especially when the one that's 40
times faster costs just $5 more than
that starting at price. And so with
everyone setting their own line in the
sand, I don't know how you would police
something like that. So, let's come back
to compare at because here there's
something that we can or at least should
be able to do to fight back. PC Part
Picker is an incredibly useful tool
because they track pricing across
multiple retailers over time which helps
shoppers determine what an item is
actually worth and how a current price
compares to uh historical pricing. But,
we've noticed a pattern of behavior,
especially here in North America, where
retailers are actively fighting against
similar services.
Similar websites that have tried to do
what PC Part Picker did, but more
broadly, have crumbled under the
pressure, like Price Zombie, a tool that
tracked price history across multiple
online retailers, and then collected
affiliate money from the traffic that
their links generated. That actually
sounds like a business model that would
be beneficial for everyone, right? Well,
Amazon didn't think so, and allegedly,
they barred Price Zombie from their
affiliate program for violating its
rules that prohibit showing Amazon
prices that are more than 24 hours old.
Given that Amazon Affiliate was 90% of
Price Zombie's revenue, it was a death
blow. Then, there's CamelCamelCamel,
whose CEO has said outright that they
live or die by Amazon, and that they
also prohibit showing Amazon prices next
to pricing from a competitor, which is
why they decided to only display Amazon
data, despite originally also tracking
Best Buy and Newegg on separate
websites. How does Amazon wield so much
power here? In the EU, for instance,
Idealo is a huge website that somehow
manages to display and compare prices,
even historical prices, across a ton of
retailers, including Amazon. What are
our alternatives? Well, there is one,
but I'm not recommending it.
It's Honey.
Those blood suckers, with their PayPal
money, have somehow managed to build and
keep alive a tool called Droplist that
seems to do a pretty decent job of
scraping prices and tracking price
history. It's not as good at showing
price history across retailers all in
one place like Idealo is or Price Zombie
was, and it seems to glitch out a bit
with certain retailers, but it is there.
It is insane to me that this is the only
tool we could find that could do this
job outside of tech. And it wasn't just
us. It seems like you just need to have
major financial muscle in order to get
away with this.
>> [music]
>> On that note, the next closest thing has
probably got to be Google Shopping, but
[music] even that doesn't prominently
display the best deal, and while its
price tracking does exist, it also
doesn't seem to show you Amazon in any
of its results in the US. Finally,
there's Capital One Shopping, which does
a good job of showing multiple retailers
with the best price up top, but doesn't
track [music] price history. Now, there
are a lot of other services that claim
to do this job, but we usually found
that they simply didn't give us the best
price. With that said, if you know of
one we missed, hey, leave a comment
below and help to spread the word. With
all that said, what can you do to stop
retailers from using deceptive practices
like false reference pricing and going
after tools that help you make more
informed purchasing decisions?
Unfortunately, the only answer is the
one that's going to be work. You've got
to get involved. Follow websites like
classaction.org and participate wherever
you can. You can also advocate for
stricter regulations and better
enforcement by touching base with
consumer advocacy groups or by writing
your government representative. I know,
[music] that's not a convenient or
especially fulfilling solution, but it's
what you can do.
Another thing you can do is steer your
hard-earned money toward businesses that
don't participate in these practices.
>> [music]
>> Like, for example, lttstore.com and our
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use the QR code on screen. If you guys
enjoyed this video, why not check out
the one that we did on starting at? It's
a little more tech focused, but I think
it does a good job of outlining why it
can be so problematic.