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Plenty of companies offer guarantees: that they offer the lowest prices, that they'll match those of their competitors or that they'll refund your money if you're not completely satisfied with your purchase. These promises are meant to get you to stop shopping and buy.
There's plenty of evidence such guarantees do indeed sway our purchase decisions. But should they?
In practice, many low-price and money-back guarantees are riddled with loopholes or require tons of work on the consumer's part -- or both. You can occasionally use one to snare a great deal. But you shouldn't let a price guarantee lull you into being a sloppy shopper. That's just what companies are counting on.
How they get you
Here are just some of the ways you can be misled:Loophole-alooza. Chrysler's 30-day, money-back guarantee is a prime example of a promise that falls apart on closer inspection.
Buyers are allowed to return a new car for any reason within a month. But Detroit News columnist Brian J. O'Connor dubbed this "The World's Most Expensive Test Drive" because of all the fees, taxes and other expenses a consumer would pay. Dealers can charge a 5% restocking fee, add a 50-cent-per-mile penalty and hang on to any sales tax paid, among other costs. The buyer gets only what's left.
O'Connor figured that someone buying a $34,000 vehicle could be out $4,600, or 13.5% of the purchase price, if she brought the car back. That's a daily cost of $153 if she drove it until the very end, much more if she returned it sooner.
"In the end," O'Connor concludes, "dealers and others say they suspect the 30-Day Return Program isn't designed to be used at all, but is more of a public-relations tool to strengthen Chrysler's quality image and soothe any misgivings of any nervous buyers."
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The other costs of compliance. Restocking fees are just one of the potential costs of changing your mind about a purchase. If you buy via the Internet or phone, you're often stuck with shipping costs, as well. Those costs can represent such a large proportion of the item's overall expense that you may well decide not to bother to return it.
If you're dealing with a brick-and-mortar store, your biggest expense in triggering a price guarantee may be your own time: time spent scanning competitors' advertisements or hunting for a better price online. If you're successful, that just means you get to spend more time running to the store, standing in line at the customer-service desk and then, if you've successfully proved your case, waiting for them to fill out the request ream of paperwork.
A ticking clock. Time also works against you when it comes to low-price guarantees from travel providers.
Typically, you've got only 24 hours to find a lower price once you've booked a flight, hotel room or rental car from a provider that offers a guarantee. The providers are betting that you won't bother -- and they're usually right.
These guarantees have become common in the travel industry, said Steven Carvell, associate professor at Cornell University's School of Hotel Administration, because they were so effective for hotel chains.
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