Best Buy Complains About Walmart's iPhone 5 Holiday Sale, Claims $65,000 Profit Loss in One Day

[MacRumors]

The Wall Street Journal notes that several retailers including Best Buy and Toys "R" Us have complained to attorneys general in a handful of states about advertising practices of Walmart. Generally, the complaints stem from comparison ads by Walmart in which competitors assert that Walmart is using inaccurate pricing or non-equivalent items to claim that it offers the lowest pricing.

But Best Buy also alleges that Walmart was deceptive with its iPhone 5 holiday sale in which it dropped pricing to $127, although the article quotes $150 pricing.

Best Buy said it lost about $65,000 in profit the day Wal-Mart's promotion first ran on Facebook, because it was compelled to match Wal-Mart's advertised $150 price, even though it concluded that Wal-Mart didn't actually have a sufficient number of iPhones available.

Walmart claims that it did have sufficient stock of the iPhone 5, quoting 98% availability at its stores carrying the device. Walmart had noted as the sale launched that it was working closely with Apple on the promotion and was securing significant numbers of iPhones, but that the sale was first-come, first-served with no rain checks offered at stores where the device was out of stock.

Best Buy had already been selling the iPhone 5 for $149.99 when Walmart announced its own sale, but it is unclear if Best Buy used the $73 difference from regular price or $23 difference from Best Buy's sale price in calculating its profit loss. Assuming the latter, Best Buy would have price matched on approximately 2800 iPhone 5 sales in one day.

Article Link: Best Buy Complains About Walmart's iPhone 5 Holiday Sale, Claims $65,000 Profit Loss in One Day

[AFDoc]

Sounds like a bunch of whining to me.

[ouimetnick]

awww Poor Best Buy

NOT

Bunch of clueless goof balls run Best Buy. Trying to sell Monster cables and Bose junk. And their extended warrantee.

The sales reps have no idea what they are actually talking about, and considering their geek squad is run by idiots, I don't like BB.

[cgc]

That could be an interesting way to attack a competing store.

[Quu]

Boo Hoo.

[ECUpirate44]

Wish amazon would put BB out of business already.

[Avatarshark]

We are suppose to care because...

Besides 68,000 is a drop in a bucket of multi-billion dollar gouging sales during the year

[samcraig]

As if Best Buy never advertises items for sale they only have 1-2 of?

Oh please. And Best Buy decided to price match during the holidays with their new policy. No one forced them to.

Maybe if Best Buy provided superior customer service people would still buy there.

As for Toys R Us - they are a complete mess. They should worry more about their infrastructure, customer service and empowering their employees vs a sale on iPhones.

[Porco]

um... Best Buy, you are apparently allowed to be called BEST BUY. As your name. All the time.
Suck it up!

[nfl46]

Great job, Walmart!

[bbeagle]

Every time I've tried to do a price match at our local Best Buy they call local stores to see if the product is in stock.

Most times, they cannot get through to the store in question (because the other store is too busy and won't answer their phones), or they get through, and find out that the other stores are out of stock.

Best Buy then refuses to price match because of the lack of stock in competing store. This is all stated in their price matching guarantee, but I guess not enforced everywhere.

Maybe the managers at our local Best Buys are more vigilant about not losing money on price matching. This has stopped me altogether from even trying Best Buy price matches. Which is either a win or a loss for Best Buy depending on how much they buy the product for. They either didn't lose money, or lost a sale.

[Tubebaum]

None of the Walmarts anywhere near my school had the iPhone 5 in stock when I found out about their deal. Just saying.

[rdowns]

Best Buy needs to concentrate on remaking their business or they won't be around to see 2014.

[Jaasen Jones]

Originally Posted by Avatarshark

We are suppose to care because...

Besides 68,000 is a drop in a bucket of multi-billion dollar gouging sales during the year

My thoughts exactly!

[thepowerofnone]

You are allowed to complain to the government about someone else selling a product at a lower price than yours? Huh... news to me. I thought it was just called economics.

[ugahairydawgs]

I thought Best Buy only price matched when a local store had available stock. They've ALWAYS called the other store when doing a price match for me.

[aliensporebomb]

Walmart is the devil but it's kind of hard to feel sorry for Best Buy because they obviously didn't either know that Walmart was going to do this nor did they have a plan in place for if a competing store did do this.

So how many phones did they sell? I bet they sold a ton. At less than they wanted but a sale is a sale.

[haydn!]

To make sure I'm reading this right...

Best Buy complained because a competitor sold a product at a lower price? Which they felt forced them to offer it at the same lower price, leading them to loose money?

1. It's called competition,
2. Nobody forced Best Buy to drop their price. Some customers may have still chosen them over Walmart through brand preference/convenience of location,
3. No-wonder they failed so miserably in the UK if this is their response to a bit of friendly computation.

[samcraig]

Also wanted to add that Toys R Us has no right to complain because I can't remember anyone I know ever being successful at price matching at one of their stores.

[ArchAndroid]

American companies doing to each other what they have been doing to American customers for ages.

[jessica.]

What a wonderful use of the Attorney General's resources.

[Wicked1]

Originally Posted by ECUpirate44

Wish amazon would put BB out of business already.

They won't have to, BB is bleeding cash and losing customers every month now.

The founder is trying to buy the company and go private but the board thinks BB is worth a lot more, so as BB bleeds and becomes devalued, the founder is getting the company cheaper by the month, however they can not compete with Amazon and Apple directly. I have never heard one good Geek Squad story, and I warn people not to get it.

They have become a showcase for people to look and see the products and then buy them online or somewhere else cheaper.

[PeopleTheseDays]

Originally Posted by bbeagle

Every time I've tried to do a price match at our local Best Buy they call local stores to see if the product is in stock.

Most times, they cannot get through to the store in question (because the other store is too busy and won't answer their phones), or they get through, and find out that the other stores are out of stock.

Best Buy then refuses to price match because of the lack of stock in competing store. This is all stated in their price matching guarantee, but I guess not enforced everywhere.

Maybe the managers at our local Best Buys are more vigilant about not losing money on price matching. This has stopped me altogether from even trying Best Buy price matches. Which is either a win or a loss for Best Buy depending on how much they buy the product for. They either didn't lose money, or lost a sale.

I don't understand what is happening becausing checking stock of other stores seems to be the proper way to do it. If the other stores don't have stock then you couldn't get it at that price anyway, and you're just taking advantage of best buy's inventory and/or convenience of location to obtain your item. Doesn't anyone else feel this makes sense?

[GermanyChris]

There is no such thing as friendly competition with Wallmart, but this doesn't make my Give-a-***** meter move.

[ECUpirate44]

Originally Posted by Wicked1

They have become a showcase for people to look and see the products and then buy them online or somewhere else cheaper.

This.