From department stores such as Myer and David Jones to electrical retailers like Bing Lee and Harvey Norman, and countless others including Dan Murphy's, Officeworks and Bunnings, businesses are slapping "lowest price", "best price", or "price match" signs on their goods.
This seems to be shorthand for "don't bother shopping around, we promise you'll get the best deal here". But should consumers believe the glitzy promises, or is there more (or less) to a best price guarantee than meets the eye?
Research from the Department of Economics at Harvard University indicates that lowest-price guarantees can actually work against consumers, potentially pushing prices up instead of down.
The research analysed the prices of goods sold on Amazon before and after two major US stores (Target and Best Buy) announced a guarantee to match Amazon's prices.
The author of the study, Ran Zhuo, found that Amazon's prices increased by six percentage points following the introduction of the guarantee, with larger price increases for initially lower-priced items.
Price-match guarantees may reduce your incentive to cut prices because price-cutting no longer wins customers over as your competitors will match your pricesRan Zhuo, research author
Zhuo says there are a number of theories as to why price-matching tends to result in higher prices.
"One explanation that I find intuitive is that, price-match guarantees may reduce your incentive to cut prices because price-cutting no longer wins customers over as your competitors will match your prices," she says.
When CHOICE shopped around at a number of retailers offering so-called best prices on their products, we found some interesting results. While liquor store Dan Murphy's was hard for us to beat on price, we found lowest- or best-price guarantees were mostly not a good indicator that the store was cheaper than its competition.
This isn't surprising, considering many competitors in the same retail sector boast about their lowest prices.
Product: Bosch HBF133BS0A 60cm built-in oven
Their best price: $779
Competitor's price: $697 (The Good Guys)
Product: Nude by Nature Allure Defining Mascara
Their best price: $23.49
Competitor's price: $16.77 (Priceline)
Product: Sunbeam Cafe Series EM7100 Espresso Coffee Machine
Their best price: $799
Competitor's price: $636 (Appliances Online)
Product: Logitech Multi Device Wireless Keyboard K780
Their best price: $128
Competitor's price: $89 (Bing Lee)
Product: Bosch SMS40E08AU Freestanding Dishwasher
Their best price: $848
Competitor's price: $799 (Bing Lee)
*Online prices March 2021
Some stores have very restrictive terms and conditions.
When you do find a cheaper price at a different store and want a competitor to honour it, you may find the process isn't as simple as you'd expect. Price guarantees are riddled with tricky terms and conditions, so it pays to always read the fine print.
Most stores require that an item be in stock at the competitor's store before they'll agree to price match, but some actually specify more restrictive terms and conditions.
Retravision Online claims: "...if one of our competitors has a lower advertised price for an identical product, we'll beat it." However, if you read the Terms and Conditions you'll find Retravision have self-identified a very short list of their "competitors", meaning they will price match with just four other stores (Harvey Norman, JB HiFi, The Good Guys and Appliances Online), so if you find a cheaper price at another store (like we did during our mystery shop) they won't match it.
Bing Lee promises to price match any Australian business with at least two physical retail stores. But dig deeper in their terms and conditions and you'll see they have a list of product brands that are exempt from their price matching policy, as well as "other products nominated by Bing Lee as being excluded from this Policy from time to time." Retravision also has a long list of brands that are excluded from their price beat policy.
Price guarantees are riddled with tricky terms and conditions, so it pays to always read the fine print
Harvey Norman's Price Guarantee claims to match the prices of "leading Australian instore and online retailers." However when we asked what constitutes a "leading retailer" we were told that it varies depending on the product, meaning it's basically at their discretion whether or not they will choose to price match your product.
Similarly, JB Hi-Fi promises to "enthusiastically match the price of an identically stocked competitor product", but when questioned on which stores they will actually match, they advised that price matching is "case by case" and that it's up to the individual store manager to make a decision, meaning you may just get unlucky when asking for a price match instore.
Dan Murphy's quotes their founder in their Lowest Liquor Price Guarantee: "I beat all my competitors every month, every week, every day, every hour, on every price, on every product, on every bottle..." However, in their terms and conditions they state "Competitors' premises must be within 10km of our store."
1st Choice Liquor has the same clause and also requires that the competitor's store be in the same state. So tough luck if you live in a one-bottle-shop town or on a state border – no price matching for you.
Retailers removing price match guarantees
While some retailers are leaving themselves so much wiggle room in their terms and conditions that their price match guarantees are almost meaningless, others have removed them altogether.
Big W no longer has a price match policy and The Good Guys have gotten rid of theirs too, although they do note that their prices are open to negotiation and team members may take competitor pricing into account when negotiating.
While many stores profess to match or beat competitors' prices, the reality can often be different from the expectation.
An ACCC spokesperson told CHOICE that if a business fails to honour the terms and conditions of its price match guarantee, that may be misleading or deceptive conduct in breach of the Australian Consumer Law..
If you think you're entitled to a price match and the retailer refuses to honour it, show them a copy of their corporate policy. If they refuse to price match despite you meeting the criteria in their policy, they could be breaching the ACL.
"Whether or not there is a breach of the ACL depends on how that guarantee was sold to the consumer," says Julia Steward, CHOICE head of policy and government relations. "The ACL is all about making things fair when you make a purchase, so if a reasonable person would believe the business and it's within the terms and conditions, then it's worth following up."
The ACCC spokesperson suggests you "contact the business directly to request a price match, and if this is denied, request that the business provide the reasons for the denial in writing and point to any relevant terms and conditions of the guarantee."
If the business denies you a price match you believe you are entitled to, you can contact the ACCC or your relevant State or Territory Australian Consumer Law regulator.
If a retailer refuses to honour their price match guarantee, and you've adhered to the Ts and Cs, you can make a formal complaint to your local fair trading or consumer protection agency.
Bunnings under scrutiny in New Zealand
Bunnings continues to battle The New Zealand Commerce Commission (NZCC) over 45 charges filed by the consumer watchdog in 2016, alleging Bunnings misled consumers by advertising the prices of its goods as being the lowest in the market.
While Bunnings promises to beat competitor's prices on identical, in-stock items by 10%, many of their products are exclusive to Bunnings, making price matching impossible.
The ACCC looked into Bunnings' advertising claims in 2006 and 2016
The NZCC charges allege that Bunnings' advertising campaigns "gave an overall impression it offered the lowest prices for its products when this was not true".
The ACCC looked into the retailer's advertising claims in 2006 and 2016 but decided not to take no action.
When we asked our Facebook followers if they have ever tried to have a lowest price guarantee honoured, we received lots of comments about Bunnings, with a number of allegations of unfair conduct – though these have not been verified.
Consumer experiences with price guarantees
CHOICE member Glenn61 told us he's had some success with price match guarantees, but he's also noticed some aren't fair.
"...I have also found some price guarantees to be worthless as different packaging or model numbers might be specific to the retailer offering the guarantee, making them different to an otherwise identical product being sold by a competitor."
CHOICE member Fred123 highlights another tricky tactic retailers can use to avoid price matching.
"Big W had 20kg bags of dynamic lifter for less than we paid for the 17.5kg bags at Bunnings, so we returned to Bunnings. They refused to beat Big W's price on the basis the two items were not identical.
In our experience, the bottom line is that the products must be identical, and Bunnings tries to avoid stocking identical products, hence the 17.5kg dynamic lifter."
But plenty of consumers say they've gotten a great deal using price matching
Plenty of consumers say they've gotten a great deal using price matching
"I've had Dan Murphys price match from a catalogue in the past (I didn't even have the catalogue with me to confirm, they were able to look it up), and recently JB Hi-Fi price matched an online price for a sound bar for me. Both were great about it, no hassle at all." – Caitlin, Facebook comment
"I often ask Officeworks to price match and have never had a problem. They match the price less 5%." – Therese, Facebook comment
"Yes, Good Guys, Sunbury. They fully matched an online competitor offer for a Bosch washing machine. Free delivery and removal of the old machine was included. No hassling required!" – Christopher, Facebook comment
If you don't ask, you don't get
Even if a store doesn't offer a lowest-price guarantee, or if the offer you find doesn't fall within their terms and conditions, you may find you can get a price match anyway at the discretion of the sales staff. It never hurts to ask, and it could save you big bucks.
Stock images: Getty, unless otherwise stated.