Life is tough, isn't it? Circuit City goes broke, a lot of people are out of work, and some people are complaining that the liquidation prices on the Circuit City stuff aren't low enough. (HT: Mark Anderson):
throngs of customers to stores across the nation over the three-day
weekend. But many shoppers left angry and empty-handed.
"What happened to 30%? Lies!" shouted customer Gabriel Ifrah, 52, at
the Circuit City on La Cienega Boulevard in Los Angeles on Monday,
where most items were priced at 10% off…
At Circuit City stores Monday, most big-ticket items were marked down
only 10%, including digital cameras, large flat-screen televisions,
printers and cordless phones. Less pricey items, such as wiring, video
games and video game accessories, were priced at 20% or 30% off.
"You have to start somewhere, and we have commitments to a lot of
people — banks, creditors — who are expecting a certain amount of
return, so it's not like we can go out there and go to the deepest
discounts right off the bat," said Billy Nichols, senior vice president
and director of merchandising at Great American Group, one of four
liquidators involved in Circuit City's closeout. "This is a big
financial risk for a lot of companies. We have to be economical on our
discounts."
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I feel rather sheepish about it now that I've read this post, but I went into Circuit City Saturday and came out thinking exactly the same thing – 10%??!!?? I had already been disappointed by the prospect of 30%, only to realize that nothing was actually 30% off. That being said, the lines at the checkout were incredibly long, so they must know what they're doing.
That's appalling. The Economic Bill of Rights supporters should add this to the list. Discounts of at least 50% at liquidation sales.
It will be interesting rolling these kinds of consumer attitudes into our Grand Theory of Depressions.
To people in the IT world what Circuit City is doing is normal. It was the same thing CompUSA did when they went out of business. Prices are all marked up to their original MSRP no matter what they were priced at before. Then they are marked down from there. Most large things are not competively priced untill they hit 30-50% off, but by then most good things are gone because uninformed buyers think they are getting a good deal. So for an informed consumer the liquidation really dosent offer to much unless you get extremely lucky. On the plus side if you need a shopping cart or shelfing you can pick those up for a good deal.
Gabriel Ifrah is in effect alleging lies, i.e. deception, i.e., since this is a business allegedly deceiving potential customers, fraud. Whether it is a legitimate complaint isn't affected by whether the store is going broke or a lot of people are out of work. A sob story does not excuse fraud.
Maybe you'd like to argue that it was not, in fact, fraud – that the advertising campaign that drew in customers was not, in fact, a deception. And maybe if you argued that, you'd be right.
But first you need to actually argue the case.
Constant,
I doubt Gabriel was actually formally alleging fraud here. My guess is that he, like me, was just disappointed that there were no real deals and he was being hyperbolic. Everyone needs to lighten up about this – we're just looking for good deals wherever we can find them. The fact is that Circuit City is offering crap deals.
Ahh, we run into market lessons damn near every day.
Had a plaintiff witness just last week, suing his old employer restaurant/night club owner, and he testified about talking the owner into opening the club on Mondays, a normal closed day, to alternative music to see if they could draw in enough business to make it worth while.
The lawyer who contracted me showed us his knowledge of markets by asking the question, "Well sure, opening on Monday made sense because some sales are better than no sales, right?"
No one in the room, but me under my breath, questioned what "some sales" meant in real numbers. Opening and staffing a restaurant, hiring a band, requires that "some sales" be a pretty high number or one goes into the hole real quick and joins Circuit City. Very damn few, and I mean a miniscule number, lawyers have a remote clue as to what it takes to operate a business and make an honest profit.
But, in my experience they aren't too much worse than the general public.
MinusTen: Indeed Gabriel's complaint did not rise to the level of formally alleging fraud. So then why make fun of him with "the world's smallest violin?" Are you saying that, had his complaint risen to that level, then he should not have been made fun of, but since it did not, then he should be made fun of? That's backwards!
Gabriel is evidently pissed because he felt the message which drew him in was deceptive. Whether he was wrong (as implied by the "smallest violin") or right to be pissed about this does not depend on how many people lost their jobs! It's a separate matter. Nor does it depend on whether his complaint rose to the level of formally alleging fraud. What, do people not have the right to be pissed about things if they don't formally allege a wrongdoing?
I was lured in by the advertising as well, which I would have sworn only mentioned the 30% off. I wandered the entire store and found absolutely nothing that looked like it was worth buying at the liquidation prices. I am pretty sure I saw nothing that wouldn't have been available more cheaply at Amazon.com's normal prices.
Two interesting notes suggesting they may not be pulling the wool over customers' eyes as much as implied above. The only thing I noticed that was completely sold out (this was first thing Tuesday morning) was iPod hardware, which is not normally discounted to any great degree. 10% off was a real bargain there.
And there seemed to be a huge surplus of AMD quad core desktop computers. I don't know how that compares to their normal stock of machines, but as far as I know the current generation of AMDs is generally considered a bad deal compared to the current generation of Intel machines (of which I saw none).
I did the same thing … walked out. But not because the discounts were "too low". I walked out because the items I wanted were still cheaper at BJ's even with a 10% discount.
The open box camera at liquidation prices with a missing battery and charger was $50 cheeper across the street in a new, never been opened box at BestBuy. Yes, the 10% of liquidation sale is misleading and its intent is to misleadingly convince customers the stuff is competitively priced. I returned 25 minutes later they refunded my money.
The liquidation generates foot traffic which actually increases sales, at least in the short-term.
Liquidators often engage in slimy sales practices: (1) mark the product up from its typical selling price, then mark it back down and claim a sale; and (2) mix overpriced low-quality goods from other stores or suppliers with the native inventory.
Both of these are designed to trick unsophisticated consumers into thinking they've found a good deal, when they really haven't. (To my knowledge, no Circuit City liquidator has done these things.)
Constant, you are missing the point. The point is that it is silly that "many shoppers left angry" over the content of a liquidation sale. Disappointed I could see, but does a sale price not being as low as one wants really justify shouting "What happened to 30%? Lies!"?
I mean, really, people need to act like an adult and not get bent out of shape because a store's prices are not as low as you would like. A 52 year old man who is shouting about prices not being low enough in a store really deserves to be made fun of, as he is acting as a naughty child 40 years his junior.