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Best Buy accuses Walmart of misleading, damaging holiday iPhone 5 sale

post #1 of 53
Thread Starter 
Best Buy and other retailers have complained to attorneys general in numerous states, accusing Walmart of misleading advertising in the holiday shopping season, including a discount on Apple's iPhone 5.

Joining Best Buy were Toys R Us and a number of regional supermarket chains in accusing Walmart of inaccurate prices and false advertising, according to The Wall Street Journal. In particular, Best Buy was bothered by a sale in which Walmart sold Apple's 16-gigabyte iPhone 5 for $150, or nearly $50 off its regular $199 price.

Best Buy has reportedly claimed it lost about $65,000 in profit on the day Walmart advertised its iPhone 5 promotion on Facebook. Best Buy says it was forced to match Walmart's advertised price, even though the retailer claims Walmart did not have enough iPhone 5 inventory to meet demand.

For its part, Walmart has claimed its stores were 98 percent in stock of the iPhone when the promotion ran.

iPhone 5


Beyond the iPhone 5, Best Buy also alleges that Walmart unfairly compared two different Dell laptop models in a holiday ad. According to Best Buy, Walmart showed off a more expensive Dell laptop model and claimed it cost an additional $251 at Best Buy. Walmart denies the claims.

Toys R Us also complained about a number of Walmart sales, including a toy kitchen set from Fischer Price, a Barbie doll from Mattel, and a Razor kick scooter.

Walmart has routinely offered discounts on the Apple products it carries, including the iPhone. America's largest retailer is known for relying on low-margin, high-volume sales, and also for pushing "loss leader" promotions that bring customers into stores and squeeze out competitors.
post #2 of 53
"For its part, Walmart has claimed its stores were 98 percent in stock of the iPhone when the promotion ran."

I wonder what that means. That 98% of Walmart stores had what, at least one iPhone in stock? That they had normal, i.e. non-sale price, stock levels?
post #3 of 53
This is not even worth writing about.
Best Buy will be out of business soon.
post #4 of 53
At least in Canada, Best Buy won't price match any competitor if the item isn't in stock at the time of purchase. They've always called up the closest store to check if they have inventory or if the website shows inventory free shipping.

More iPhones sold at the expense of BestBuy
post #5 of 53
Quote:
Originally Posted by davebarnes View Post

This is not even worth writing about.
Best Buy will be out of business soon.

It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Walmart shelves came from China).

A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements.

And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.

But at least we get to buy cheap stuff. 1hmm.gif
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post #6 of 53
Quote:
Originally Posted by OriginalG View Post

At least in Canada, Best Buy won't price match any competitor if the item isn't in stock at the time of purchase. They've always called up the closest store to check if they have inventory or if the website shows inventory free shipping.
More iPhones sold at the expense of BestBuy

I believe that's technically true in the U.S, as well, but I don't think the procedure is always followed. A busy sales rep is likely to just accept the competitor's ad without checking when there's a line of customers a mile long all waiting for service.
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post #7 of 53
Ah, Apple and the company that it keeps sometimes......

"When you lie down with the dogs, you rise up with fleas."
post #8 of 53
Only the mega corporations will survive. They'll lose money just to eliminate others since they can afford to do so. Amazon, Costco, Walmart, Target, etc are eating others alive. Amazon in particular is a huge problem for small online retailers. If your goods are also available there, might as well close up shop now. Look at Home Depot and Lowes, they've eliminated ALL independent small hardware stores including larger chains such as the old Channel, Rickel and Pergament for those who remember.

Its the world we now live in as we work towards the day when just a select few select multi-trillion dollar (with a "T") corporations have the ability to control every aspect of your life.
post #9 of 53
Originally Posted by jragosta View Post
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 1hmm.gif

 

Our own little slice of Foxconn.

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post #10 of 53
Not meeting demand is not the same as falsely advertising a product for which you don't have to sell. If that we're a crime then Apple would be in big trouble for not selling its products too cheaply.

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post #11 of 53
Quote:
Originally Posted by Tallest Skil View Post

 

Our own little slice of Foxconn.

 

 

Exactly.

post #12 of 53
The week before Christmas they dropped the price to $127, picked one up then, the person in front of me was getting 4 of them. They had plenty of stock. All carriers and in Black and White.
post #13 of 53
Quote:
Originally Posted by jragosta View Post

A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements.
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 1hmm.gif

 

This is the same at Home Depot.  I used to work at a saw manufacturing company, years ago they were trying to get into Home Depot but couldn't come to reasonable terms (their products do now grace the shelves at HD).  Our VP of Sales told us his team went in with a great presentation.  The HD team cut them off short and basically told them, "Just give us the lowest price possible and it must be lower than any price you give to anybody else."  It's their way or the highway and all they want to do is undercut.

 

My mother is a big contributor to the "cheap stuff" mentality, among many, many others.  She is constantly looking for a "deal" or how she can spend less.  I completely understand that but it quickly goes wrong.  The problem, as far as I can tell, and especially considering my mother, is that she has lost sight of what constitutes a "deal" and what is just cheap.  

 

For example, over the summer she decided she need to have more glasses of a particular style in her cupboard.  We were visiting shortly after and she was gushing about the "great deal" she had found (at IKEA, I think) on the new glasses.  They almost exactly matched the ones she had (true, almost) but were only a dollar each as opposed to the $5 she had paid for each of the originals.  However, at the very first touch I could tell the glasses apart from each other, could do it blindfolded.  The originals have much thicker walls and have a nice weight to them, the "great deal" glasses are very light and thin.  Just dropping and ice cube in and I can tell which is which.  My mother has confused "deal" with "cheap".  I tried to explain that it would have been a deal if THE SAME glasses were now priced lower, but buying lower quality products for less isn't a deal.  She doesn't get it.

 

Ironically, she laments the fact that local stores are going away.  She claims she would support them if they were still here and that she doesn't mind spending a little more for the convenience of having them in town and being a local business.  However, she routinely travels at least 12 extra miles to go to the Home Depot in the next town over rather than going to the local hardware store that is about 2 miles from here house.  When my sister was visiting she wanted to pick up band-aids to pack for her daughter's summer camp trip.  My wife suggested the local pharmacy, my mother said she could save 50 cents per box by going to the Walgreens that is 20 minutes away.  50 CENTS!!

 

 

Unfortunately, I believe this sort of mentality is widespread.  It must be for places like Wal•Mart to exist and thrive as much as they do.  I hope more people can see the difference between "cheap" and "a deal".  I don't mind paying for quality but it's getting harder and harder to find places that offer it.

 

Sorry about the crazy thread drift...

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post #14 of 53
Quote:
Originally Posted by jragosta View Post


It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Walmart shelves came from China).
A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements.
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 1hmm.gif

You are absolutely right.  I refuse to shop there for all of these reasons.

post #15 of 53
Hey - remember when Best Buy got busted comparing the picture quality delivered by Monster HDMI cables with "regular" HDMI cables...except the regular HDMI cables were composite cables?
post #16 of 53

I did not think I would some day read such experiences on a North American site. Indeed, the search for the lowest price has a hidden cost, and this is only possible due to the fact that the way we spoil natural resources is not priced. I am convinced that Mother Earth will remind us of some basic facts about natural limits, and sustainable growth. Among other consequences, this will privilege local offer.

post #17 of 53

I was buying an iPhone 5 for my sister's Christmas present this year, and although I do not like to shop WalMart, was intrigued by the deal they purported to offer.  I wanted a 64 GB ATT Black model, and called several stores in my area (Central NJ).  All of them reported having "no iPhone 5" stock at all.  It was telling that the deal was only for in store purchases and not available from their website either.  I can only imagine the amount of people they suckered into their stores by selling relatively few iPhone 5 units cheaply compared to how many people either got a different phone or at least made other purchases "since we're already here".

 

I wound up happily not having to set foot into a WalMart, and ordering directly from Apple with free next day shipping, plus I was able to have the AppleCare placed on the phone from the start.  (I believe you have 14 days to bring physically bring an iPhone into an Apple store after purchase if you want to add AppleCare after buying the phone elsewhere.)  I always recommend that my non technically savvy friends buy at an Apple Store because of the better customer service.

post #18 of 53
Quote:
Originally Posted by MacCentric View Post

I was buying an iPhone 5 for my sister's Christmas present this year, and although I do not like to shop WalMart, was intrigued by the deal they purported to offer.  I wanted a 64 GB ATT Black model, and called several stores in my area (Central NJ).  All of them reported having "no iPhone 5" stock at all.  It was telling that the deal was only for in store purchases and not available from their website either.  I can only imagine the amount of people they suckered into their stores by selling relatively few iPhone 5 units cheaply compared to how many people either got a different phone or at least made other purchases "since we're already here".

 

I wound up happily not having to set foot into a WalMart, and ordering directly from Apple with free next day shipping, plus I was able to have the AppleCare placed on the phone from the start.  (I believe you have 14 days to bring physically bring an iPhone into an Apple store after purchase if you want to add AppleCare after buying the phone elsewhere.)  I always recommend that my non technically savvy friends buy at an Apple Store because of the better customer service.

 Same experience. When I called several stores in my area, they were all sold out. The sales clerks didn't even look it up in their inventory, they all just knew immediately, every store was sold out. Luckily, I found Fry's Electronics was selling it at $126 (vs. Walmart's $127). In retrospect, I think the only reason Fry's was selling at the ~same price was to have a chance at competing with the likes of Walmart. And now I feel sleazy for capitalizing on a deal that was probably only started to desperately compete with a megacorp, validating said megacorp's undercutting practices. :(

 

God damn you Walmart, and Science disprove you!

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post #19 of 53
Quote:
Originally Posted by NIZZARD View Post

Hey - remember when Best Buy got busted comparing the picture quality delivered by Monster HDMI cables with "regular" HDMI cables...except the regular HDMI cables were composite cables?

 

And herein lies one of my most used lines when people complain about the antics of certain corporations: "it's capitalism, stupid".

 

When there's no rules to the game apart from making money, it's the company which can find the best loopholes in the system/fool the most people that wins.  Given the opportunity without any real consequences, almost any company will do it.  And unless consumers have hours and hours of free time (and care enough) to find the companies which don't (ha), there's nothing else in place to stop it.

 
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post #20 of 53
Quote:
Originally Posted by bear1201 View Post

The week before Christmas they dropped the price to $127, picked one up then, the person in front of me was getting 4 of them. They had plenty of stock. All carriers and in Black and White.

 

And I got Best Buy to price match so out the door with a new phone for my wife for $136 and change.  They did call Walmart next door but no one answered.  In the end, at Best Buy it would have been $149 plus tax (if Walmart picked up the phone in electronics) but the savings got the otterbox from Amazon and my wife is happy.

post #21 of 53
Quote:
Originally Posted by jragosta View Post


It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. ...

 

Which would have been equally true if you had written,


It is definitely worth writing about. It's not about Best Buy, it's about Amazon's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Amazon shelves came from China). [this number probably higher]
A manufacturer has no choice but to deal with Amazon and accept their draconian supply requirements.
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 

 

Thank goodness we have the DoJ watching out for us. Oh, wait, they're the ones who are trying to make it impossible to compete with Amazon in publishing and bookselling.

post #22 of 53
I bought the iPhone 5 for $127 ( 2 year ATT contract) at Wal-Mart during the holidays, and there were plenty in stock.

I am grateful for Wal-Mart. I went to medical school in the Caribbean (Antigua) where there was no Wal-Mart. All the local "mom and pop" stores had horrible inventory and exorbitant prices since they had no competition. Wal-Mart has done a lot of good by saving people money. Best Buy is a dinosaur that will go out of business soon.
post #23 of 53
My local Best Buy had iPad mini's leading up to Christmas BUT you had to ask for them. None on display. In fact in the iPad display out of the 4 full sized iPads, only 2 worked and they were filthy. The 2 non working had broken power cords that prevented them from charging so they had dead batteries. This was not a one time thing but was the same from through the last 2 weeks prior to Christmas.

The reason I was given as to why the iPad minis were not on display - "we don't have time to bring them out". I was told this 3x over 2 weeks.

If you asked to see a tablet they took you to competitors, not iPads.

As for the Mac display selling iMacs and MacBook Pros, half of those were not working either. Though all the inexpensive windows systems were running.

Good for Wal Mart - they have the know-how to maximize traffic in their stores. Best Buy could capture these same customers but they fail to display and market Apple Products through shoddy displays and steering customers to other tablets and computers
post #24 of 53
Put the numbers in perspective.

Best Buy is claiming they lost $65,000 profit price-matching Walmart because of lower pricing. Note that Best Buy has approximately 1150 stores. That claimed loss averages $56 per store. Or, slightly more that the price match differential for one phone.

Yes, Walmart's alleged advertising practices are wrong.

But, don't lose perspective. Best Buy isn't a saint either. This is a turf battle.
post #25 of 53

I never knew you could sue a competitor for having a sale.

 

Also, I'm curious what day this happened.  I went to Best Buy the week before christmas to buy an iPhone 5 for a gift, it was on sale for $50 off.  I didn't have to ask for a price match, they were having a sale.  They were out of stock for the 64 gig model so I had to get the 32 gig model.  I tried to get a price match at Verizon for the 64 gig model, they said they would lose money if they sold them at that price, so wouldn't price match.


Edited by alandail - 1/4/13 at 11:35am
post #26 of 53
Quote:
Originally Posted by macaholic_1948 View Post

Put the numbers in perspective.
Best Buy is claiming they lost $65,000 profit price-matching Walmart because of lower pricing. Note that Best Buy has approximately 1150 stores. That claimed loss averages $56 per store. Or, slightly more that the price match differential for one phone.
Yes, Walmart's alleged advertising practices are wrong.
But, don't lose perspective. Best Buy isn't a saint either. This is a turf battle.

 

Put the practice in perspective. If Walmart was in fact engaged in misleading advertising, and the complaints aren't just about iPhones, the AGs and possibly the Feds, should come down on them like a ton of bricks, a) to punish them and b) to make an example of them. Misleading advertising isn't just an unfair business practice, it's also an injury to consumers. If these allegations prove to be true, there ought to be a clear message sent that this sort of thing won't be tolerated, even if, say, BestBuy, lost $0.01 per store as a result. It doesn't matter who is or isn't a saint, it's about letting companies know they can't play fast and loose with the law and get away with it.

post #27 of 53
That's sad that Best Buy is struggling. They are a great Minneapolis, MN based company that I want to see survive.
post #28 of 53
Quote:
Originally Posted by MacCentric View Post

I wound up happily not having to set foot into a WalMart, and ordering directly from Apple with free next day shipping, plus I was able to have the AppleCare placed on the phone from the start.  (I believe you have 14 days to bring physically bring an iPhone into an Apple store after purchase if you want to add AppleCare after buying the phone elsewhere.)  I always recommend that my non technically savvy friends buy at an Apple Store because of the better customer service.

You can get AppleCare anytime before the standard warranty expires.  That goes for Macs as well as iDevices.

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post #29 of 53
Quote:
Originally Posted by icoco3 View Post

 

And I got Best Buy to price match so out the door with a new phone for my wife for $136 and change.  They did call Walmart next door but no one answered.  In the end, at Best Buy it would have been $149 plus tax (if Walmart picked up the phone in electronics) but the savings got the otterbox from Amazon and my wife is happy.

So you got Best Buy to price match them to $127 and then didn't even buy the Otterbox there as a "thank you"?  Ruthless

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post #30 of 53
Quote:
Originally Posted by AppleInsider View Post

Best Buy says it was forced to match Walmart's advertised price, even though the retailer claims Walmart did not have enough iPhone 5 inventory to meet demand.

Best Buy and other stores were not "forced to match Walmart's advertised price" by anybody other than their legal obligation to uphold their own store policies. It sounds like they have a flawed policies. How about either scrapping the price matching policy or alter it to where they price match if the nearby stores have the product in their inventory?

post #31 of 53

Cry me a river. This is best buy not getting their employees to follow their own policies which is checking to see if local competitor has in stock.  I would like those employees to transfer and work at my local best buy. Mine will do whatever they can to NOT give you a price match, even on their own items.

 

I don't remember Walmart guaranteeing stock like they did with the iPad on black friday and give out rain checks. 

 

It was a 1st come, 1st serve no rain check sale.

post #32 of 53
Quote:
Originally Posted by jragosta View Post

It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Walmart shelves came from China).
A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements.
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 1hmm.gif

This is EXACTLY the problem. This country is a disaster of "free market" lies and exploitation.

My dad offered to help me with an iPad purchase (don't get jealous; i'm poor and he's offering just a nudge to get me to the amount I need). He called me up to tell me about the sale at Walmart. I told him I don't give Walmart my business. He didn't have any complaint.

Now I'm even more content with my choice to wait and continue to save my pathetic money.
post #33 of 53
Quote:
Originally Posted by Andysol View Post

So you got Best Buy to price match them to $127 and then didn't even buy the Otterbox there as a "thank you"?  Ruthless

 

 

Yup...they were $49.99 instead of $23.99.  It is my money and I save what I can. :)


Edited by icoco3 - 1/7/13 at 6:40am
post #34 of 53
Quote:
Originally Posted by anonymouse View Post

Put the practice in perspective. If Walmart was in fact engaged in misleading advertising, and the complaints aren't just about iPhones, the AGs and possibly the Feds, should come down on them like a ton of bricks, a) to punish them and b) to make an example of them. Misleading advertising isn't just an unfair business practice, it's also an injury to consumers. If these allegations prove to be true, there ought to be a clear message sent that this sort of thing won't be tolerated, even if, say, BestBuy, lost $0.01 per store as a result. It doesn't matter who is or isn't a saint, it's about letting companies know they can't play fast and loose with the law and get away with it.
I didn't address the issue of misleading advertising. In fact, I said the alleged practices were wrong.
post #35 of 53
Boy, what great "savings" mentality, supporting a terrible company like Walmart for what essentially comes down to less than one monthly phone and data plan that will come with the iPhone for 24 months. And that is the pure service cost, nothing to show for at the end of the contract other than the iPhone itself.
post #36 of 53
Quote:
Originally Posted by jragosta View Post

It is definitely worth writing about. It's not about Best Buy, it's about Walmart's use of its massive market power to disrupt the markets and put smaller companies out of business. In our thirst for ever cheaper products, we've created a monster. It has already largely destroyed Main Street, USA. It is well on its way to destroying even major competitors. And it has done enormous damage to our national economy (at one point, something like 30% of all products on Walmart shelves came from China).
A manufacturer has no choice but to deal with Walmart and accept their draconian supply requirements.
And, in the end, what do we get? Lots of minimum wage jobs with no benefits, no security, and violation of equal protection laws.
But at least we get to buy cheap stuff. 1hmm.gif

It's called predatory pricing. A term you love to throw around yet neglected to do so this time.
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post #37 of 53
Quote:
Originally Posted by macaholic_1948 View Post


I didn't address the issue of misleading advertising. In fact, I said the alleged practices were wrong.

 

And I, in response, said the numbers don't matter.

post #38 of 53
Quote:
Originally Posted by macaholic_1948 View Post


I didn't address the issue of misleading advertising. In fact, I said the alleged practices were wrong.

A lot of companies, including Apple (more than once), have settled charges with the FTC for deceptive advertising. Flipping thru a few it doesn't look like the government comes down very hard on them. Most are allowed to accept Consent Agreements without specifically admitting guilt.

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post #39 of 53

I scored two iphone 5's from Best Buy, even though I hate those basterds.

They gave me 140 each for iphone 4's and the 5's was on sale for 150.00 ea.

 

Total cost for 2 brand new iphones 5....twenty bucks.

 

FU BEST BUY

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post #40 of 53
Quote:
Originally Posted by Gatorguy View Post

A lot of companies, including Apple (more than once), have settled charges with the FTC for deceptive advertising. Flipping thru a few it doesn't look like the government comes down very hard on them. Most are allowed to accept Consent Agreements without specifically admitting guilt.

 

On the other hand, if you have other companies with money complaining about it, the Feds might be a little less eager to sweep it under the carpet than they are for consumer complaints. And no one, including Apple (although, of course, they aren't really involved in this complaint in any way, despite GG tossing their name in there gratuitously), should be allowed to get away with it.

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