Lately, I’ve seen a ton of bad press about various retailers using sleazy sales tactics to boost profits. Because of the recession, businesses are under so much pressure to make a profit that they are resorting to deception and underhanded methods to make a sale. For example, I was completely shocked last week when I read that a very large and well known electronics retailer was accused of purposely denying price match requests and refusing to sell computers without service contracts.

The other day my wife and I were shopping for cell phones only to be bombarded by hidden fees tacked on at the register. While the display price for the phone we wanted to purchase was extremely attractive, it apparently didn’t include a bunch of extra costs that really pissed me off.

Photo By Bonked Producer

What annoyed me wasn’t the money per se, but how the fees were conveniently introduced after we had already filled out a few pages of paperwork. Even though we still bought the phones, we left the store with a bitter taste in our mouths.

As if my shopping experiences couldn’t get any worse, I was recently trying to buy a new digital SLR camera body online when the store I called tried to tack on additional costs for the battery and AC adapter. All of those accessories should have been already been included in the cost of the package yet this retailer tried to deceive me and sell me them separately.

Is this what the world of retail is coming to? Are retailers so strapped for cash that they have to resort to these tactics? I’m a firm believer that while these methods of extracting additional money may make more money in the near term, they can have devastating effects to a company’s reputation in the long run. Instead of trying to extract every last cent from customers, why not try these tactics instead?

Be Upfront About Prices And Add Value

Instead of adding little fees here and there to your products, why not just charge what you want to charge and be done with it? If your prices are higher than your competitors who are resorting to lowball tactics, why not focus on adding additional services or value adds that can justify your prices?

A perfect example of a store that adds value is “The Runners High”, a running shoe store located close to where I live. Now this store never has sales. They flat out charge full price for all of their shoes and never offer discounts for anything. So how do they stay in business?

For one thing, the store’s staff is composed solely of former collegiate and semi-professional runners. They take the extra time to analyze your stride and recommend the perfect running shoes for your feet.

I remember the first time I walked into the store, the sales rep spent over a half hour analyzing the arches of my feet and watching me run around the store before recommending me a pair of shoes. Anyone who is willing to spend so much time analyzing my smelly feet deserves a sale in my opinion:)

Anyways, the point is that these guys provide value and expertise to justify their prices. Sure, I could have taken their recommendation and saved about 20 bucks by purchasing the shoes online but I didn’t. I was perfectly satisfied paying the extra premium for taking advantage of their expertise.

Contrast this to my cell phone buying experience where I got blindsided and pissed off with my purchase. I wouldn’t have minded the extra fees if they offered even a little something in return. Heck, just tack on this fee into the cost of the phone or offer me a free month of service instead. The cell phone store extracted an extra 18 dollars from me at the expense of my happiness.

Honor Your Store Policies

Most stores offer low price guarantees and insurance plans on purchases because they know that you are highly unlikely to take advantage of them. The worst part is that some stores will try everything that they can in order to avoid paying out those that do. If you’re not serious about a store policy, don’t even bother implementing it.

Recently, a friend of mine tried to get a price match on a hard drive that he purchased from a well known electronics retailer. Less than a week later, he saw the same exact hard drive offered for less elsewhere so he brought his receipt back to the store for a price match.

But the store would not honor the lower price and the reason they gave was a bunch of bull. Basically, my buddy was denied the price match because clearance sale items at competing stores are not eligible. Does that sound reasonable to you? The amount that the store saved by not performing the price match was about 15 dollars. Was 15 bucks worth pissing off a loyal customer?

Make Your Customers Leave Your Store Happy

How about focusing on making all of your customers leave your store happy and satisfied for a change? I recently had a conversation with one of my friends in the retail electronics industry asking them why they resort to hidden fees and other sneaky sales tactics.

His reply? Because it works. They have detailed software programs that analyze pricing structures and model customer satisfaction based on store statistics. The computers are telling them that this strategy will bring in more money so that is why they continue to do it.

Personally, I find it hard to believe that these computers can possibly model the intricacies of human interaction and loyalty. Can a computer model the likelihood that someone is going to recommend your store to a friend? Does the program account for the effects of negative comments made about your customer service?

The reality is that human nature lends us to focus on short term results. Computer programs can tell us how we can make more money given the status quo but can’t possibly predict the long term effects. Stores should stick to their guns and focus on providing excellent customer support at the expense of making the short term buck.

I admit it. I’m guilty. In a previous article I wrote on how to spend money wisely, I stressed how one of the keys to saving money was to avoid spending it altogether. One of the main tenets of the article was to avoid going to the mall for recreation and leisure.

Well today I couldn’t help it. It was an incredibly nice day (Mid 70’s sunny) so my family and I decided to go on a walk at this ritzy outdoor mall nearby our house. For all of you who live in the Bay Area, I went to Santana Row which is a street lined full of expensive boutiques and fancy restaurants.

This was the first time that I had gone shopping in probably about a year, so I was really shocked by the high prices and the abundance of wealth that surrounded me.

The Handbag

My wife has been in the market for a handbag for quite a long time, so when we walked by one of her favorite handbag stores, Ferragamo, we had to walk inside.

Jen: So you know Christmas is coming up right?
Steve: Yes…(I don’t like where this conversation is going…)
Jen: And you know how raising our baby has been extremely stressful
Steve: uh huh (Objection! Leading the witness!)
Jen: I deserve something special don’t I?
Steve: Of course you do dear. (How much is this little conversation going to cost me? I hope this Ferragamo place is a discount shop)

At this point, she started eyeing this one particular handbag and tried it on in front of the mirror.

Jen: What do you think?
Steve: Well, it looks like a bag….that can be held in your hand…as well as on your shoulder.
Jen: Isn’t it beautiful?
Steve: No, I think it is heinous…. How much is it?
Jen: Are putting a price on my happiness? If you must know, it’s only one.
Steve: One hundred dollars? That’s not so bad. Go ahead and get it.
Jen: **cough**cough**. One thousand dollars. **clears her throat**
Steve: Holy $%!@. Son of a motherless %!@^$.

** Long Pause **

Steve: Well if it will truly make you happy, then go ahead and get it. You haven’t purchased anything frivolous in a very long time.
Jen: I’m not going to get it. I just wanted to test you to see if you’d buy it for me. That was very sweet of you.
Steve: Tell you what. Next time we go to China, I’ll pick you up a Ferragami. It’s just as good as Ferragamo at one-tenth the price.

Phew! I was so relieved that reverse psychology did the trick. Never in a million years would I have thought that a handbag could cost 1000 dollars. Besides, we need to save that thousand dollars so I can buy myself that flat screen television for Christmas:)

The Snack

After the handbag shop, my wife and I were hungry and decided to grab a snack. A cute little boutique bakery caught our eye and we decided to give it a try.

Me: Yes, I’d like a chocolate croissant and one of those puff pastries.
Jen: And I’d like a chocolate truffle please. Oh and a cup of tea too.
Clerk: No problem. Anything else?
Me: Nupe.
Clerk: That will be 27 dollars please.
Me: Huh? There must be some mistake.
Clerk: I don’t believe so sir. Each of those pastries and truffles are 7 dollars a piece.
Me: Wow!… Holy!…No Way! Ok, sorry about that. I think I’ll just have a single croissant then.

Since when does a piece of chocolate and a pastry cost 14 dollars? What world am I living in?

The Baby Boutique

Our final stop was this fancy baby boutique that sold designer toys and clothes. I full on admit that I’m a sucker for baby items for my cute little daughter. She’s now at this age where she’s mobile (she literally started crawling a few days ago) and she loves to play with toys and explore.

We had our eye on this educational block set that was pretty cool. Basically this set consisted of 26 blocks each with a letter of the alphabet embroidered on the side. When each block is squeezed, a voice says the letter out loud and iterates a bunch of words that begin with that letter. In my mind, it was the perfect learning toy for my daughter.

Me: Sir, how much are these blocks?
Clerk: They are 10 dollars.
Me: Wow, that’s it? I’ll take them.
Clerk: Very well. Your total is $260 dollars.
Me: Huh?
Clerk: The blocks are 10 dollars each and there are 26 of them.
Me(Mentally): Holy @#%^. Son of a motherless &*^&*. (Prolonged cussing)
Me: Sorry sir, I don’t think we’ll be purchasing these blocks today.

It was quite embarrassing to wait in line only to back out of the purchase, but there was no way in hell I was going to spend 260 dollars on some blocks. I can easily make blocks and say the letters out loud myself.

Arriving Back At Home

On our way home, I couldn’t help but wonder how the heck these stores stay in business. Especially in our current economic doldrums, you would think that people would be trying to save their money and avoid luxury items altogether. I managed to escape our little impromptu shopping trip down only about 20 dollars. Never again will I ever go shopping in that ridiculously priced mall again.

While I didn’t regret coming home empty handed, I did feel kind of bad about not buying my daughter anything. But when I got home, I handed her an empty water bottle and an empty box and she was ecstatic! She literally played with those items for hours, laughing and giggling the entire time.

I think my daughter was secretly trying to tell me something. You don’t need to spend money to be happy. Come to think of it, we didn’t really need any of those extraneous items anyways. The 1000 dollar handbag was completely superfluous and my wife certainly didn’t need one. But buying a flat screen television on the other hand definitely requires further evaluation.