Tag Archives: Walmart

When Is A Sale A Deal?

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I was wondering the other day when a great deal is really a deal? Is it only when it’s on sale, or when it’s priced right, even without a so-called sale? How conditioned are we that it’s only a deal if it’s advertised at 25, 30 or 40% off?

What got me thinking was trying to buy a TV for my brother at Future Shop. Tuesday two weeks ago, the one I wanted was $319 – I just didn’t have the room in my car. Two days later, when I was a buyer, it was in the flyer and $20 higher! It was now an advertised deal, but at a higher price. When I asked the salesman what the story was, the response he gave me was that “that happens all the time.” There was more to his explanation, but I had already stopped listening.

Chevy in the U.S. has now started something called Total Confidence Pricing. It’s another attempt to get away from rebates and temporary sales such as employee pricing, clearance, or the likes. In Canada GM has tried that two or three times in the last decade or so. How successful will they be this time around when other manufacturers advertise so-called sales? Saturn was based on that concept and never did get much market share with their one price and no haggling and…well, they’re gone.

The giant retailer JC Penny, roughly equivalent to our Bay, last year went to something called everyday value pricing. No more screaming deals for the day or the weekend. They are trying to emulate WalMart-type pricing. As of now, it’s a total failure. Sales were down 19% in the last year and another 21% in the last quarter which just ended. For a retail giant, that’s staggering and frightening. Honest and fair pricing all week and all month isn’t working. Their new CEO is from Apple, but I’m not sure he can turn around a 102 year old company.

We’re not that interested in fair pricing it seems. While the deals at JC Penny, Saturn, and maybe Chevy were fair and good, we want the SALE sign screaming at us. We’re suckers for a sale. As long as it says 40% off, or has a $2,000 rebate, we’re all excited and pull out our credit card, or want to know where we can sign up for the financing. We don’t really know if that’s now a good deal or not, but that sign sure makes us buy.

Three Things I Didn’t Know

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Wal-Mart, the world’s largest retailer has their own MasterCard. That’s something probably everybody knows as we keep getting pitched at the cash register. But I didn’t know that it is handled by Wal-Mart Canada Bank. Yes, Wal-Mart is a bank, something they got approval for in 2010. As of now, it isn’t a deposit taking institution but I wonder if they’re still working on that.

Virgin Money is Sir Richard Branson’s bank. Branson is best known for Virgin Air, Virgin phone, etc. He isn’t in Canada, but keeps talking about it, mostly because our pathetically small number of banks that automatically mean zero competition and huge fees and interest charges. I would love to have him come to Canada.

The one thing you know about Bronson is that he enters industries and everyone gets very nervous. Because Bronson is a huge believer in customer service and always approaches businesses from a totally different business model perspective. One of the features of Virgin Money is that it has facilities to quarterback family and friends’ loans. If you’re making a loan to a family member or someone you know, Virgin Money will do all the set up, paperwork, contracts, filing, signing and collections. I am absolutely dead set against family loans, but anyone who ignores me would have a great formalized way of doing it.

With new credit card legislation a couple of years ago, card issuers can’t increase your credit limit without your consent. Remember that their main goal is to have you owing the most amount of money and making the smallest payments. THAT is how they maximize their interest income.

These days, you’ll get a notice on your statement that you qualify for a limit increase – you just need to call. Or they’ll send you a separate mailer, and may even phone you from their call centre. Don’t do it – unless your limit is really low, it generally becomes more temptation.

What I didn’t know is that the trend of getting you out of the bank and to the ATM machines is changing. Think about it: They can’t solicit or sell you if they can’t see you!

When I was at one of the big no-service banks last week, I overheard the teller next to me tell people: My screen just showed that you qualify for a limit increase on your card. Want me to go ahead and put that through? Is that clever or what? And in the few minutes I was there, this teller was three for three. She converted all three people she asked to a higher limit. Great for the bank…often not so great for the person thinking they’re being flattered.