Federal Judge Slams Best Buy In Price Match Ruling

Written by Evan Schuman
March 25th, 2009

A federal judge last week (March 19) slammed Best Buy on price match issues and allowed a class action lawsuit against the chain to proceed.

One of the most interesting exchanges in the case was an internal document from Oct. 19, 2006, from Phil Britton, who Best Buy had identified as “a member of Best Buy’s competitive strategies group.” In the memo, Britton said that the chain disregards its own policies. “What is the first thing we do when a customer comes in to our humble box brandishing a competitor’s ad asking for a price match? We attempt to build a case against the price match. Trust me, I’ve done it, too. Let’s walk through the ‘Refused Price Match Greatest Hits.’ Not same model? Not in stock at the competitor? Do we have a free widget with purchase? Is it from a warehouse club? They have membership fees, you know. Limited quantities? That competitor is across town? We’ve got financing. Is it an Internet price? It’s below cost.”

In a deposition, Best Buy officials tried to blunt the significance of that memo by testifying—and I couldn’t make this up—that the employee was just kidding. U.S. District Court Judge Colleen McMahon seemed to not find their explanation amusing.

“Best Buy’s explanation for this document—and its blatant attempt to minimize the clear import of Britton’s statement—is that Britton ‘is a long-standing employee with a sense of humor, so whatever he said about “greatest hits,” he’s got a sense of humor to make things—one of our—our values is having fun while being the best and he does embrace that.'” The judge then offered a one-sentence comment: “The plausibility of this explanation will be for a jury to decide.”

Testimony indicated that Best Buy officials would discourage—if not outright forbid—price matches to be done if the margin was insufficient. The chain also supposedly used restocking charges to strongly dissuade consumers from trying to use the price match program.

“Best Buy’s own records reveal that the price match guarantee was applied inconsistently and that 60 percent of customer requests to match warehouse club prices are wrongly denied,” McMahon said in her decision.

The judge ruled against Best Buy on just about every legal argument raised. For example, one of the Best Buy defenses was that an insufficient number of accusations could be made against them. Another argument tried to attack one of the witnesses against them.


2 Comments | Read Federal Judge Slams Best Buy In Price Match Ruling

  1. Tracy Says:

    Best Buy will be the next big store to shut down. And, the American Public, who is so tired of greed and corruption and being ripped off, will gladly give their business back to mom & pop, if there are any still around.

  2. Cheryl Says:

    CompUSA (aka Tiger) will be the next ones to face a similar lawsuit! They promise to match their online prices but purposely put different SKUs on the same items (by adding a letter or something at the end) and have the BALLS to say it’s a different item. Even the store manager told us that is what their corporate office does!!


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.