An investigation conducted by Choice has warned consumers to be wary of claims made by retailers such a ‘lowest price’, ‘best price’ or ‘price match’, finding that often these claims can actually work against the consumer by stopping them from shopping around.

Retailers Harvey Norman, Bing Lee, Officeworks and Retravision Online had their price promises closely scrutinised along with other retailers such as Dan Murphy’s, Toys R Us and  Chemist Warehouse.

Choice said, “While liquor store Dan Murphy’s was hard for us to beat on price, we found lowest- or best-price guarantees were mostly not a good indicator that the store was cheaper than its competition.”

In the electrical retail cases studies, Choice reported the following:

  • Bing Lee’s best price for an Electrolux EWF 12832 washing machine was $829. Choice found the same product for $799 at The Good Guys.
  • At Harvey Norman the Asus UX32LA Ultrabook was $1,296, whereas at Retravision Online it was $1,127.
  • Uniden’s XDECTR055 Cordless Phone package was $327 at Officeworks, or $299 at Bing Lee.
  • In personal care, Retravision Online retails the Philips AquaTouch AT890 Electric Shaver for $99, which is sold for $84 at the Shaver Shop.

Recent research has found that price and value for money is one of the least important factors for shoppers when they visit an electrical retailer.

The Canstar Blue Survey found that point of sale service was the most important factor in determining customer satisfaction, followed by good store layout and, thirdly, product range. In other industries surveyed by Canstar, value for money often tops the list however it was equal last with price compared to other bricks and mortar retailers.

This evidence suggests consumers are happy to pay more in your store if they feel like they’re getting good service and expert advice.

However, retailers promising to match or beat a lower price must be prepared to honour this promise or face the wrath of the ACCC.

Earlier this year Flight Centre was fined $11 million after the ACCC alleged it had induced Singapore Airlines, Malaysia Airlines and Emirates to stop undercutting the prices offered by the travel agency by directly offering international airfares at lower prices.  Flight Centre’s ‘Price Beat Guarantee’ was relevant in this case as the ACCC submitted “that despite the representations being made to the public, Flight Centre had engaged in concerted attempts to remove other cheaper airfares from being made available to consumers in the first place.”

Businesses can make reasonable disclaimers on such price beating promises. For example, most of the retailers included in the Choice investigation would not meet a price match on clearance or sale items, of it a deal was offered as part of a membership or loyalty reward.

In its report, Choice made special mention of Retravision Online’s disclaimer, which is broader than most.

Retravision Online guarantees to beat any advertised competitor price, the caveat being, “In some cases there are prices which Retravision Online cannot match. In these cases we will offer you the best possible price that we can.”

Other retailers state they won’t sell an item below its cost price.