Retail Dysfunction: 3 Ways Retailers Try to Cure Purchase Anxiety

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Retail Dysfunction:

3 Ways Retailers Try to Cure Purchase Anxiety

Have you ever had “purchase anxiety?” Yes, that’s a real thing. http://rapidlearninginstitute.com/selling-techniques/overcoming-purchase-anxiety

Don’t worry. It happens to everybody. There’s even a cure for it. Instead of a blue pill to get your buyer erection raging once again, retailers employ several marketing strategies that are sure to nail that sale. Including a myriad of “deals,” “special offers,” and “guarantees” to lure you into their stores. Of course, there’s nothing wrong when they work out in your favor.

But, sometimes they don’t.

Just like they say, “The road to hell is paved with special offers and guarantees,” or something like that.

TheToneKing.com takes a closer look at some of these incentives and gives you the lowdown on why sometimes they’re just not worth it.

Return Policy: No Questions Asked?

Take home a piece of gear. Try it out. If you’re not 100% satisfied, just return it within 30 days for a full refund! What’s not to like?

Most people think that retailers are being benevolent by offering return policies. But, remember, no retailer is going to do anything that loses money. Depending on the competition, a return policy can be very easy or restrictive. No competition? You ain’t gonna be returnin nuthin! A mile long stretch of guitar shops? 30 days! No questions asked!

The easy going return policy works in favor of the bigger retailers. They have more space to accommodate increases in stock due to heavy returns, and they have the cash flow to make sure that they’ll still be able to make their rent at the end of the month. An easy going return policy draws customers away from their competition who don’t have the space or the funds to be able to afford a return policy.

So, after being in someone’s house, trailer, or garage for 30 days, these guitars are returned and hung back on the wall to be sold (again) as new. Full pop. No discount as a demo or returned piece. It’s a magic trick. The guitar is sold, resold back to the dudes who originally sold it, and Shazzam! It’s brand new again. No matter how many times it’s sold, gear is always new.

Then, there are always exemptions. The most obvious ones come from online retailers.  Most of them wont take returns on “over-sized or over-weight items.” Good luck trying to return that Mesa Boogie 4X12 cabinet that weighs so much that you’re convinced that they lined the damn thing with freaking lead in case there’s a nuclear holocaust and you’re forced to use that heavy bastard as a portable bomb shelter while you’re in the middle of a guitar solo.

Heavy stuff ain’t the end of it either. If you bought a guitar online with free shipping, companies will deduct the return shipping costs from your refund. But, if you did pay for shipping, well they don’t refund that money either. Either way, that guitar that you’re returning cost you at least $50 bucks. So, I guess you just rented it.

Brick and mortar stores have exemptions as well. Scratches and dings are completely understandable reasons not to take returns on gear. Of course, you never notice that Gibson SG already had a broken tuning gear when you bought it. So, buyer beware! Always check the gear before you lay down any cash for it.

The 30% Myth:  

Some retailers like to advertise that they’ve always got the lowest prices around. Part of that is that they’ll advertise the fact that they shave 30% off of the price, every day. Of course, they don’t tell you that everybody else does this, too. It’s the difference between MSRP and MAP.

This pricing system is a monumental pain in the ass. Here’s how it works!

The manufacturers sets three prices for the gear:

1 – Cost:

Cost is what the dealer pays for the gear. Depending on the markup on the gear, this could be anything. The common notion is that “Cost” is always 50% of the “List Price.” But that’s almost never the case. Not to mention that whatever the “Cost” of the gear is, the dealer usually still has to pay for shipping, which they have to add on to the overall selling price of the gear.

2 – MSRP:

Manufacturer’s Suggest Retail Price is almost always a complete joke. This is because almost nobody charges this price for gear. Unless you walk into a shop where the owner hates your guts, you will probably not pay this price for anything.

3 – MAP:

Minimum Advertised Price is about as popular as US congress. The way it’s supposed to work is that retailers should be able to have some wiggle room between MSRP and MAP. Unfortunately, because many larger retailers advertise MAP every day, everybody else is forced to use MAP as a starting point. Remember how I said that some retailers claim that everything at their store is always 30% off? MAP is usually 30% below MSRP. Unfortunately, MAP has become the starting point for most dealers. And the difference between Cost and MAP really doesn’t leave much wiggle room at all.

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Using these three models, most dealers try to make a few bucks while they navigate the troubled waters of a toilet being forced to flush down a burrito. While, MAP has inadvertently restricted the amount of profit that a dealer can make on gear, proponents have argued that it levels the playing field for dealers.

* MAP Up Yo Azz – Gangnam Style!

Of course, there has been one retailer – who will remain nameless! – who doesn’t want to play under the same rules as the other boys. Basically, this unnamed retailer sent a letter to manufacturers, telling them to stick their MAP pricing models up their collective asses.

And here’s the letter that Guitar Center sent to manufacturers, telling them to stick their MAP pricing up their collective asses.  http://www.musicincmag.com/News/2011/111206/Advertising%20Price%20Policy.pdf

Some manufacturers have been trying to buck these MAP battles by leveling the playing field even further. Mesa Boogie and Rivera, for example, have one selling price. There’s no such thing as wiggle room because if you’re caught trying to sell the amps for less, they’ll pull their gear from your stores. Given Guitar Center’s letter to manufacturers claiming that they were going to “do whatever is necessary to remain competitive,” it will be interesting to see how these manufacturers will respond to this line in the sand.

 

Match This!

Given what we have learned about MAP pricing, Price Match Guarantees should be a no brainer. Price Match Guarantees are done from the advertised price, and since the benchmark is the Minimum Advertised Price, prices aren’t going anywhere. But, some dealers do “Lowest Price Guarantee,” which can be more of a mess.

Of course, this is already a big conflict for guitar shops. If everybody is already selling at MAP prices, you really can’t advertise that you’ll sell for less. But that’s exactly what LPG’s do.

You’re saying, “My competitor is selling this Fender ’62 Jazzmaster for $1,359.99. Now, I’m not gonna give you a number, but it will be 5% less than what they are selling it for.”

Basically, you’ve advertised for a lower price than MAP without actually saying anything.

But, hell. Who cares? I’m still going to get a good deal, right?

Well, maybe.

LPG is a psychological mind game to get you into their store. If you hear the words Lowest Price Guarantee, you’ll think that the retailer is already selling it at the lowest price. But, that’s not what a LPG is.

For Reference, here’s Guitar Center’s LPG. http://m.guitarcenter.com/MBL-GLP-g25735t0.gc

If you happen to find someone advertising the same piece of gear for a lower price, you still have to bring the ad to them to get a refund on the difference. On top of that, the ad has to be from another brick and mortar music store that is an authorized dealer of whatever you bought. You can’t bring in an ad from Sweetwater to get your LPG. Hell, if you bought a piece of electronic equipment that you could’ve bought at RadioShack for $100 bucks less, too bad. RadioShack ain’t no music shop, so no refund for you.

It’s a numbers game. They’re betting on three things:

  1. You wont continue to search for a Fender Jazzmaster after you’ve already bought one.
  2. There aren’t any other authorized dealers that will be advertising locally that will offer the same gear for a better deal.
  3. You’re too damn lazy to drive back to Guitar Center to save $20 bucks.

Not All Bad. Unless it is.

Retailers are going to prescribe whatever they can to alleviate your symptoms of purchase anxiety. Sometimes, these prescriptions work out. They get you in the door and get you the gear that you want at a price that couldn’t be had anywhere else. Everybody’s humping happily in a field of daisies. But, sometimes the prescription’s side effects only make things worse, and you end up with explosive diarrhea of the wallet.

Let us know some of the side-effects that you’ve experienced from “deals,” “special offers,” and “guarantees.”

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Filed Under: Commentary / EditorialsFeatured

About the Author: Marc published his first novel Becoming in 2010. It’s a kick-ass book with monsters and dreams and stuff, and you should buy it. Since then, he’s written thousands of articles for TheToneKing.com, many of which have been picked up for circulation by manufacturers and other news outlets. His next book, Drugs and Pancakes, should be available early 2014 if his alcoholic editor can find time to work on it in-between destroying his liver and screaming about punctuation. He graduated from Roosevelt University with honors, which means that he’s not as dumb as he looks. He’s been playing guitar for over 25 years, which is almost twice as long as most of his students have been alive.

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  1. A Realist says:

    Hotrod-V…. really?! Do you get a killer price on a Ford, complain that it is underpowered, and get upset when they wont just ship you a new engine to put in it? If you hacked up the wiring on those new pickups putting them in, would you expect them to return the guitar then? What if the pickups they sent you dont do it for you? How much is a set of duncan HB’s… $130? Thats 20% what you paid for the guitar. It sounds to me like they were perfectly reasonable by asking you to return it, or try an exchange in case yours was defective. Also, the BC Rich website clearly says duncan designed pickups.

    http://bcrich.com/models/guitars/Bich/Bich-Perfect-10/55

  2. michael says:

    Low price guarantee applies to online price matching at Guitar Center box stores now. However, if you use it expect them to try and make it inconvenient and then act pissy towards you for upholding their policy. This has happened to me a couple of times now when making local purchases. I know they are in the business of profit, but Im in the business of not over paying. If the pricing structures make it so there is no wiggle room why do employees get such steep discounts that average customers do not. I had a “manager” of on GC tell me about the discount he gets and the fact they can loop all other advertised discounts to buy just about anything from guitars to amps lower than what anyone walking in would ever be able to get it at. I encourage people to use their smart phones and get deals in brick and mortar stores. You are just leveling the playing field for yourself.

  3. tony93666 says:

    hey Lou Condon –

    Musicians Friend IS Guitar Center… so is Music123.

    American Musical Supply and zZounds are also the SAME company.

    just sharing info-

  4. hotrod-v says:

    I just ran into one of these “traps”, and usually I wouldn’t name the retailer by name, but I am so dissatisfied that this time I will!
    I made a large purchase from Musician’s Friend (not MY friend anymore!) of four different items, one of which was a B.C. Rich “perfect 10″ that was not exactly “perfect”. The guitar was advertized with a certain set of pups that are reasonably high output, but what I received was a guitar that was priced very close to $1,000 with “Duncan Designed” tinny, weak pickups that were more at home in a $200. beginner guitar!
    So here is the problem: When I purchased the guitar they had a promotion going on aimed at tax refund recipients that could be used on any single piece of equipment over a certain amount of money. As well as that, they had recently dropped the price of the guitar by $ 100. Great deal right? I happily paid the $ 649. for an $ 899. guitar, and could afford to get another needed item that I otherwise would have had to forgo.
    Issue: when I received the guitar and tried it out to find it less than acceptable, I immediately called customer service to see about fixing this problem. My idea was to have some pups shipped to me that would work well in the guitar, an acceptable idea to me seeing as I felt a little deceived. This idea was found acceptable by the person I talked to that night and was “all set up”. The next day I received an email stating that this could not be done, but maybe I could PURCHASE the pups at a “reduced” price. I won’t go into the five day tap dance that followed, but ultimately I ended up faced with two options; return the guitar for another, although they didn’t stock and could not get the other BCR that was priced the same, and had been my second choice from another dealer, or return the guitar for a refund. A refund of the wonderful discount that I had paid! This would have left me very short of affording the other piece that I wanted! STUCK. I ended up with another BCR from them, and although it is a great guitar, it is not what I wanted. BUYER BEWARE!!!!

  5. Lou Condon says:

    Great article Marc. I have a friend at a GC clear across the country at an un-named store location. She gives me pretty good discounts of about 20-23% off their website price. The only thing about GC I hate is they have always charged sales tax :-( which in turn eats away at your good discount. Then other stores like Musicians Friend will have a 15% or a 20% discount that totally kills my GC discount. I really hope that our great politicians don’t screw up our Tax Free internet buying. That in itself will kill hundreds of online retailers. Besides my very First guitar I have never paid Retail for my gear, including my Mesa Boogie Roadster Head I got from an un-named small shop. I couldn’t say NO to the discount I got from him.

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