Ogden Standard Examiner
13 November 2008
"The Good, the Bad, and the Ugly of On-line Shopping"
By MICHAEL R. ASH
Guest commentary
With Christmas around the corner and the economy struggling, most consumers will try to maximize their dollar this holiday season. For some consumers, the Internet appears to offer this allure.I’d like to examine the good, the bad, and the ugly of Internet shopping.
The Good
If you want it, it’s usually available on the Internet. You can shop from your home, in your underwear, or at 2 a.m. Sometimes (but not always) the prices are lower than you can find in a brick-and-mortar store.
The Bad
Some e-sumers have had their credit cards compromised or they were charged for things they’ve never ordered or received. A lot of consumer electronics are grey market. Grey-market cameras, for example, are cameras that are not imported through the manufacturer’s official U.S distributor but are exported from a country where the dollar still has a little pull. The e-tailer then sells the camera to the American consumer for less than the U.S. dealer’s cost.
Having been in the consumer electronics industry for nearly three decades, I’ve had plenty of experience with grey market products. Some models are slightly different than the U.S-imported version or don’t come with English instructions. They’re not covered by U.S. warranties and some U.S. manufacturers won’t even fix the products at any price. Some e-tailers deceptively advertise U.S. warranties because the e-tailer has a U.S. shipping address.
One customer with a new $300 grey-market digital camera saw me for repair. Without a U.S. warranty, the e-tailer told him the camera needed to go back to Japan — a three-month round trip. Or, they told him, he could pay for a repair at a local repair center (my store) and they would reimburse him. A month and $150 later, he was still waiting to get reimbursed.
Web e-tailers of legitimate U.S.-imported cameras sometimes remove important pre-packaged items which they try to sell back to the e-sumer. Hours after one Internet shopper purchased a digital camera, the Web retailer called to tell him that the camera did not come with a battery or charger (items prepackaged by the manufacturer). When he refused to pay $200 for those items they said they would cancel the order at a 20 percent restocking fee. The customer had to take up the fight with his credit card company.
While some consumers think that Internet purchases are tax-free, Utah residents are still legally obligated to pay the “Use Tax” when they file their returns (see incometax.utah.gov). Lastly, the Internet is at least partly responsible for the demise of the “Mom & Pop” shops and the personalized serviced they offer.
The Ugly
If a consumer knows what she wants, has done her online homework, and buys her product from a Web vendor, more power to her. When this same consumer exploits a brick-and-mortar store as an Internet showroom, she is engaging in pundit piracy.
If you want to handle the product before shelling out the funds, brick-and-mortar retailers offer this service and incur higher costs for doing so. For someone to take advantage of a store’s experts — their pundits — with the foreknowledge that they plan to buy on the Internet, is shameful. Many sales people are on commission — which means they earn their income from their knowledge and expertise. To milk their expertise with no intent of paying for their service is pretty much like getting a great waitress and not leaving a tip. There are always rationalizations and excuses. Here are the most common with responses.
• How is pundit piracy any different than shopping between local retailers? A: Local retailers are in the same boat of paying for showroom space and sales staff and work on nearly identical profit margins. Since they will typically match other local prices, you can purchase from the store that gives you the best service.
• Many stores don’t pay commission/I don’t need the salesperson’s help. A: If all people purchased products on the Internet, there would be no sales staff or store to showroom products. If local retailers sold their wares from vending machines their prices would be lower as well. If you take advantage of a showroom floor or sales staff, you should expect to pay more.
• Local retailers charge too much. A: Dwindling profit margins have contributed to the demise of most Mom & Pop stores as well as many big-box stores. Most popular consumer electronics have profit margins of 7 percent to 15 percent. A local retailer may only make $130 on a $1,000 TV or camera. After wages, rent, advertising, health insurance, utilities, etc., there is little net profit. A red flag should be apparent when the same item is listed on the Web for more than about 10 percent less than a local store.
• Let other buyers pay local store prices, I just want the lowest price. A: If you’re just looking for the best price, then why visit a local retailer before making your purchase?
Once you consume someone’s time and decide to buy because of the salesperson’s pundit expertise, it’s only fair that they get paid for their services. If you’ve seen a better price locally, ask them to match it.
You’ll get the best local price, service before and after the sale, and you’ll keep food on the table of those who’ve help you make an informed decision.
Ash is electronics manager at a local jewelry store. He lives in Ogden.