It says 5'1", he should fit in our server rack.
No, it's starting at 5'1", and here it's listed as up to 7 feet.
Hold on, I found the same guy on Amazon and it says compare at 6'2"?
What does that mean? He's an organic mask. We just want him in the server rack.
What are you even talking about? No.
This type of deceptive marketing has existed for as long as I've been 4'1",
but more recently it's become an even bigger problem.
For example, just last year, Best Buy.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.
Starting at this segue to our sponsor.
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, 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?
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 multi-bit 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, Vera 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 claims 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 U.S.
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.
Now, I've picked on Best Buy a lot so far. But I promise 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 discounts.
Then of course, there's Amazon. They do use a suggested retail price,
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 it.
Now, I could continue to give examples, but I think at this point it would 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 two 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 two has turned into this catch-all but 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 two 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 a 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 Camel Camel Camel, who 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 New Egg 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 f***ing honey. Those bloodsuckers, with their pay tell money, have somehow managed to build and keep live
a tool called Drop List 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.
On that note, the next closest thing has probably got to be Google Shopping,
but 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 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 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, like for example, LTTstore.com and our sponsor.
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.