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Sunday, February 10, 2008

THE RIGHT THING: ABSOLUTELY FREE -- MORE OR LESS

Penney Adams wanted a new car radio. She and her husband, Marc Leroux, shopped around, visiting several big-box stores before settling on the radio that had the best options and price.

Among the deciding factors, Adams says, was that the store they eventually chose offered free installation.

When the bill was rung up, the two found that they had to pay extra for a dash kit, cables and harnesses. Adams wasn't too surprised about these additional costs, however.

"Nothing `free,"' she says, "is ever actually free."

What did surprise her, though, was that the bill included a $35 charge for "shop radio installation."

She called the sales clerk's attention to the charge for something that had been advertised as free. He pointed out that, though the advertised price for her radio was $139.99, she was being charged only $104.99. That cost, plus the $35, equaled the total advertised price.

"Even though I wasn't being charged an additional cost for the installation," Adams says, "I was still actually paying for the installation."

This doesn't sit right with her.

"If you are still paying for the installation as a separate line item," she asks, "then doesn't that mean that the installation is in fact not free at all, but rather included in the price? Shouldn't their advertising change from `free installation' to `installation included?"'

She understands that the difference may be nothing more than a technicality, since she would end up paying the same amount for the radio either way. And she knows from her initial shopping around that she got the best price on the radio, better than she would get from other stores that would add on installation charges to their advertised price.

Still, she considers this a hidden cost that should have been disclosed. Should it?

Adams didn't end up paying more for the radio than she wanted to, so ultimately she got a fair deal. But she raises a good point.

That she would have ended up paying the same amount either way doesn't mean that the store shouldn't be as clear as possible in revealing what customers are paying for when they buy a product. If the store has to bill the item the way it does -- because, for example, of a need to allocate certain costs and income to particular store departments -- that seems a fair practice. But how difficult would it be to change the wording of the advertising to more accurately reflect what the customer is paying for?

Conversely, if store management believes that it's more effective to advertise "free installation," then they should consider changing their billing to actually provide free installation and sort out the accounting some other way.

The right thing for the store to do is to make every effort to avoid anything that might leave customers wondering if they were being misled. In this case, the customer and the store would end up exchanging the same amount of money, so the change to a clear procedure would be a no-expense investment in building trust.

c.2008 The New York Times Syndicate
(Distributed by The New York Times Syndicate)

1 comment:

William said...

Where is the ethical question here? She was advertised a car radio with installation for $139.99 and she got a car radio with installation for $139.99... why does it matter how the store accounts for this or if there are two line items on the bill? A store is not ethically bound to avoid all possibilities of confusion so long as any confusion or a meeting of the minds is made before the deal is done. What harm is done other than a little confusion? The store advertised "free installation" rather than "installation included" because customers, including the very customer here, respond to the term free and it closes sales. The practice is commonplace and wholly ethical... 'Tis a bit of a tempest in a teapot here, me thinks...