In 2007, you would have thought I was a contestant in a year long sale snatching competition at Macy’s. So much so, that I rose to the level of a platinum credit card holder by years end.
Throughout that year, I reveled in my jaw dropping deals, especially in the children’s Ralph Lauren Polo department. With my Macy’s 20% off coupons, I enjoyed in some instances, 80% off retail prices when I hit the right sale. I bought my 3 and 5 year old son’s polo shirts for around $7.00 (reg. $35) and even a sweatshirt regularly priced at $75 for $18.25. For prices like that, who wouldn’t outfit their kids in the ultra-preppy designer?
That all came to a screeching halt in 2008 and now I am beginning to understand why. I have visited Macy’s several times over this past year with my 20% off coupons in hand ready to scoop up some more deals only to leave many times over empty handed. It seems that my coupons no longer apply to any of the major brand name collections.
Since 1980, manufacturers have been banned from placing a minimum price on their products. You may have seen a MSRP price on products ranging from bread to cars, but that Manufacturers Suggested Retail Price wasn’t legally enforceable. That is until last summer.
In June 2007, the Supreme Court ruled that certain minimum-pricing pacts between manufacturers and retailers are not necessarily illegal and such pacts should be judged on a case-by-case basis.
What does that mean exactly?
The Supreme Court, specifically Justice Kennedy, feels that these pacts could encourage competition, resulting in higher potential profits to then promote certain brands or offer better services.
I think I would prefer a discounted price.
So don’t be surprised if some of those brands that you have been accustomed to buying at rock bottom prices, especially on line, are no longer available.
One such example is Nine West. In May, the shoe company (I love because they are the only dependable brand that consistently carries size 10.5), was granted their petition to set minimum prices on their products.
Why are companies doing this?
Well aside from increasing profits, companies are afraid of tarnishing their brand’s image. Their feeling is that the prestige of their product is reduced with each reduction below the threshold of their MSRP.
This minimum pricing isn’t limited to just apparel and accessories. It spans the whole of consumer goods and services. According to the Wall Street Journal, “Consumer advocates say they are seeing the impact particularly in baby goods, consumer electronics, home furnishings and pet food.”
So now I am beginning to understand why my already over inflated favorite name brands are no longer available at such coveted prices. I can only hope that the pendulum will swing back in the consumer’s direction.
I’m interested to know if you have noticed this change in pricing. Leave me a comment and let me know.
To read more about this story in today’s Wall Street Journal, click here.