Retailers accuse Walmart of falsifying “Walmart Challenge” price-comparison ads
I’ve blogged off and on about the accuracy of Walmart’s price comparison ads, but now other retailers are calling Walmart out on them as well.
Best Buy, Toys R Us, and several supermarket chains have filed legal complaints against Walmart’s advertising practices, saying that in some cases, the prices being compared in the “Walmart Challenge” commercials weren’t active during the same weeks the commercials were filmed. Example: A store has an item that regularly sells for $3.99, but the week the Walmart challenge was done, it may have been on sale for $1.99. Walmart has been accused of using the higher, previous-week’s price in their challenges to stack the challenge in its favor.
This is something we’ve known for a long time – as far back as last summer, I took the Walmart Challenge with a receipt I got at Meijer. Walmart compared my receipt to their prices and said I would have saved 65% by buying the same groceries at Walmart… but when I did the math, I paid 20% LESS at Meijer over Walmart’s prices — without even taking into account any coupons. Something wasn’t adding up.
CouponsInTheNews.com has several reports on the complaints against Walmart:
Best Buy, Toys “R” Us and a number of unnamed supermarket chains have filed formal complaints with several state attorneys general (read: “Legal Challenges to the ‘Walmart Challenge’”).
In letters to the state’s Consumer Protection Division, Toys “R” Us lodges similar complaints as those it filed in Florida, with somewhat stronger wording. It accuses Walmart of “cherry picking” products and prices, displaying prices that were not accurate at the time the ads ran, employing “bait and switch” tactics in promoting products for which it didn’t have sufficient stock, and engaging in “potential predatory pricing” for selling some items at well below cost.
But in this case, it gets a little murky. Toys “R” Us complained that in one ad, Walmart used different sets of prices that were in effect on different dates. One ad, filmed on December 9th, featured Toys “R” Us prices that were no longer accurate when the ad began airing on December 12th. Yet, Walmart acknowledged, some of its own prices featured were also not accurate when the ad was filmed on December 9th, but instead were in place by the time the ad began airing on December 12th. At no time, it appears then, were the prices that were compared in effect at the same time.
Interestingly, through following this story I learned that Toys R Us’ attorney has listed one of my Walmart price-comparison blog posts in its complaint to the Michigan Attorney General. The thing is, the Walmart challenge can easily be “stacked” in favor of Walmart at any time by buying items that aren’t on sale, and are at their highest prices at a competitor – then making sure to only buy items that are cheaper at Walmart. It’s even easier if Walmart compares prices from stores taken during completely different weeks and sales cycles, when neither of the items were actually on sale at the same time.
As this article concludes, “if Walmart is the one making the rules – only Walmart will ever win the Walmart Challenge.”