Liu Shinan

Retail tricksters only fool themselves

By Liu Shinan (China Daily)
Updated: 2011-02-16 07:55

A Beijing woman recently bought a cell phone for 4,800 yuan ($728) at a well-known up-market shopping mall, but her husband later found that particular model sold for between 440 and 600 yuan in other outlets. The man asked the shop in question to refund part of the money, alleging a "suspected act of deliberate fraudulence". The man said that it was understandable that prices in the mall were higher than in other places, given its prime location, but that a 10-fold increase was unacceptable.

"The price is too exorbitant to be reasonable," the man said.

The shop rejected the man's request. The manager said that prices were dictated by the market and the store's operating costs had to be taken into account. He said his shop "has not violated any law or rules in asking for a higher price since the price is openly stated".

Theoretically what the manager said is correct. In a normal, free market, the seller is free to set whatever price he likes as his shop does not hold any monopoly over the market and has not coerced the customer into buying.

If customers regard the price of an item to be too high they won't buy and the commodity will perch on the shelf forever unless the seller lowers the price. That is the normal way sellers interact with buyers, or the "market law".

However, things are much more complicated in reality, especially in China, where the market is not fully mature yet, and where a credit crisis seems to be plaguing every aspect of our economic life.

Then why did the shop charge such a high price? Did they not worry that the mobile phone would not sell at all, given that the model was not a famous brand at all? The model, KPT K999 by name, is a product of the Shenzhen-based Kong Profit company. Obviously the shop in question was not worried about not selling the phone, even though it was from a little-known brand.

There are customers who are not savvy when it comes to electronic products. They have no idea about the differences between different products. These customers are the target of retailers who dare to ask for exorbitant prices.

In such instances, one cannot help but suspect that the retailer is deliberately trying to defraud the customer. At least, it is safe to say the retailer is being misleading.

In the present case, the shop may be immune from punishment - since an official from the relevant authorities, ruled out any action - but the shop's managers had better not gloat over the sale, even though they may have got away with their sales trick.

They will likely lose their credibility and reputation if they continue the practice. Since the case has been widely reported, anyone who has heard or seen the story will shun the shop. The shop will be the real loser.

And the plaza where the shop is located will also suffer. The mall's administrators should review their management of the shops.

Those who try to fool the customer only make fools of themselves in the end.

The author is assistant editor-in-chief of China Daily. He can be reached at liushinan@chinadaily.com.cn

(China Daily 02/16/2011 page8)