In a rare consumer challenge at NAD, a shopper looking for a bargain at Toys R Us wanted to take advantage of the price guarantee prominently displayed on signs in-store stating “Price Match Guarantee – Spot a lower advertised price? We’ll match it. See a Team Member for details.” He brought his dice game to the counter with an Internet search showing a lower price. He was reportedly told the only acceptable benchmarks were prices from Best Buy or www.toyrus.com. He left, bought the dice game elsewhere, and complained to our friends at 112 Madison Ave.
The retailer explained that the clerk was simply misinformed and if the customer had talked to a manager, he would have still been denied the price break but been told the right policy – that the appropriate benchmarks were prices in any competing brick and mortar store or at toysrus.com. The retailer further explained this price guarantee was standard among retailers and even more generous as it allowed for comparisons to the retailer’s own website (and allowed the lower price as long as the website did not say “online only prices”) and allowed benchmarks to online pricing more broadly for some baby gear items (but not for toys).
NAD conceded that space was limited on in-store banners. It also reiterated a point it has made in prior cases that reasonable consumers would expect such a program to have additional terms and conditions or fine print. That said, it concluded a reasonable takeaway from the claim that the retailer would match if a customer “spot[ted] a lower advertised price” is that the customer would expect this included prices on competing websites. NAD recommended the broad claim be discontinued or that it be revised to make clear that for toys the match was limited to competitive in-store price ads.
A takeaway for retailers is that price guarantees get a fair amount of scrutiny at NAD and by the states and should be advertised carefully. While certain exclusions like Black Friday deals and the like can reasonably be explained in the terms and conditions, major limitations on whole categories of products or competitive sets that are excluded should be made clear up front when and where the price policy is advertised.