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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 54
    neilmneilm Posts: 656member
    "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?
  • Reply 2 of 54
    This is not even worth writing about.
    Best Buy will be out of business soon.
  • Reply 3 of 54
    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
  • Reply 4 of 54
    jragostajragosta Posts: 10,473member
    davebarnes wrote: »
    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. :\
  • Reply 5 of 54
    jragostajragosta Posts: 10,473member
    originalg wrote: »
    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.
  • Reply 6 of 54
    Ah, Apple and the company that it keeps sometimes......

    "When you lie down with the dogs, you rise up with fleas."
  • Reply 7 of 54
    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.
  • Reply 8 of 54


    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. image


     


    Our own little slice of Foxconn.

  • Reply 9 of 54
    solipsismxsolipsismx Posts: 19,566member
    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.
  • Reply 10 of 54


    Quote:

    Originally Posted by Tallest Skil View Post


     


    Our own little slice of Foxconn.


     




     


    Exactly.

  • Reply 11 of 54
    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.
  • Reply 12 of 54

    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. image


     


    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...

  • Reply 13 of 54

    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. image


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

  • Reply 14 of 54
    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?
  • Reply 15 of 54


    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.

  • Reply 16 of 54


    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.

  • Reply 17 of 54

    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!

  • Reply 18 of 54
    auxioauxio Posts: 2,035member

    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.

  • Reply 19 of 54
    icoco3icoco3 Posts: 1,460member

    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.

  • Reply 20 of 54
    anonymouseanonymouse Posts: 6,581member

    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.

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