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Frugal Friday: Would You Pay to Look Edition

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Best Buy Showrooming

Happy Friday everyone! Last week I shared my thoughts on the $175,000 bed that is being made by a British company targeting ultra wealthy individuals in the hopes they’ll see a need for a pricey bed in one of their five vacation homes and got a pretty good response from it. With that in mind I thought I would share about another puzzling article I read on Yahoo Finance this week. The article was in regards to the “showrooming” dilemma facing retailers today. I know that many retailers are dealing with this as more and more people go to buy things online through either Amazon or some other website. Showrooming was nearly the death of Best Buy last year and who knows whether or not they’ll be able to withstand the competition. They did change their price matching policy recently to try to remain competitive. I applaud their changing, though I wonder if it might be too little, too late. That is why the article this week caught my eye as worthy of discussion.

The situation comes to us from Australia where one brazen retailer has decided to charge a $5 “just looking” fee to anyone that wants to step into his establishment to look and peruse the store. He hopes the approach will counter the showrooming issue he has been dealing with. Working in advertising, I can understand that businesses are feeling the pressure and need to get creative to stay afloat. Unfortunately for many businesses they are facing times where the consumer has more power and more options to make their purchasing decision. Mrs. Frugal Rules always pokes me when we’re in a store and I pull out my phone to check a price. I know it may look a little tacky, but if I can buy something we need/want for a decent savings then I am going to do it almost every time. All that said, this retailer is facing some pushback from his unpopular decision and I completely understand. He promises to deduct the cost of the fee if you do make a purchase, but would that make it worth it to you to still go into his store? I know, for me, it would not make it worth it to go into his store unless I was seeking something only he sold. The retail business can be a cut throat sector, but that forces retailers to adapt and be willing to change. Someone from The Consumerist was quoted saying nearly the same thing in the article and I think they hit the nail on the head. By having a policy like this I fear the retailer is only going to annoy customers and risk losing even more because they were unwilling to adapt.

Ok, enough of my aimless thoughts. I did want to mention that I was able to pick a winner to the Frugal Rules six month blogiversary giveaway! The winner was Kayla Pacton and she chose the $100 Amazon gift card as her choice. Thanks again to everyone who participated! This has been a busier week than normal for me but I was still able to read some great blog posts. If you have the time this weekend I encourage you to check out some of the blog posts and stick around to read some of the blogs as they have some great content other than what I highlighted.

Blog Post of the Week

How to Define Success on the Internet on Frugal Portland

To be honest, this post is from last week but after reading it last Friday I had to share it. I love Kathleen’s sentiment as she shares about how easy it can be to compare ourselves to others in life and in the blogosphere. Being a numbers geek I find myself guilty of doing this all too often. Kathleen shares about the importance of finding the ‘why’ behind why you write. Like Kathleen, I write largely because I want to help people avoid the same stupid financial mistakes I’ve made in my life and hopefully have a little fun along the way. Even if you’re not a blogger, I encourage you to check out Kathleen’s post, you’ll be glad you did!

Other Blog Posts That Ruled

How to Raise Successful Children on Krant Cents                            

Family Finances: Somebody is Watching You on Canadian Budget Binder

The Benefits of Comparison Shopping on Money Smart Guides

I’m an 80’s Child Because… on Girl Meets Debt

Should I Invest or Pay Off Student Loans First? on Debt RoundUp

Nourish Your Mind on The Random Path

 

Odd Search Terms

Best ways to watch March Madness without being caught…Call in sick (I kid, I kid)

Holly Mckenzie works at shoppers drug mart…You don’t say

How to be accepted by wealthy people…Take up yachting!

Is Warren Buffett pulling out of the stock market…If he is then I think I will be following him!

Wal-Mart EZ tax refund advance…run VERY fast!

Will Bill Gates give me $20,000 to pay off my school bills…Sure, give him a call!

If I leave Starbucks, what happens to my 401k…They give it to you in coffee beans.

 

 

Would you pay a showrooming fee, or do you think this retailer has made a wise choice? Have a great weekend everyone!

 

Photo courtesy of: Ron Dauphin

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

Latest posts by John Schmoll (see all)

42 Comments

  • I’ve been telling my friends for years and years “how is Best Buy still around?” One of their biggest advantages is same-day pickup of items you find online, yet I had an absolutely horrible experience with that. Was only one in line for pickup and four workers standing around but none could help me, apparently. After 15 minutes finally someone who could process my pickup came over. Needless to say, this was one of the Best Buys that were shut down. They need to focus on that advantage and make it a winner, but I feel they haven’t. Oh well, we’ll see what they do in the future to stay competitive. Maybe competing more online is the answer.

    • John says:

      Wow, that’s a sucky experience! I can understand why they were one of the ones to be shuttered. I am not certain how they’re still around either and only time will tell if they can still compete or not.

  • I think the entry fee is crazy. I might go into the store with the intent to buy, and thus getting my $5 back, but maybe the TV or item in question just isn’t what I was expecting. That isn’t to say I am going somewhere else to buy it, I just don’t want it. But now I’m out just because the product didn’t live up to the hype.

    I understand the issue stores are having with show rooming, but it amazes me how so few companies are able to adapt. I guess though it is hard when you have so many employees/physical locations/etc. to simply do a 180 and change things up. Plus there is that whole issue with the shareholders.

    Thanks for mentioning my post!

    • John says:

      I agree Jon. What does a person do when they go in with the intention to buy to only find the item is not there? I agree that showrooming does make it difficult for retailers, but they must be willing to adapt…otherwise they’ll just die a long slow death.

  • Patrick says:

    Retailer made a wise choice. The showrooming has value, and everybody on that floor knows you are looking for the best price — even if they can’t offer it. I’ve had arguments with sales people in stores who tried to guilt me into buying directly from them even if it cost me significantly more.

    Their point? It costs money to carry inventory. Of course, they’re right, but my counter was “if carrying inventory has value then somebody will charge and somebody else will pay.” It’s inevitable.

    Another option would be to give chain managers flexibility right on the spot.

    • John says:

      I would have to respectfully disagree Patrick. I think it’s an incredibly poor and not thought through decision. I understand showrooming makes it difficult for the retailer, but just means they have to be willing to adapt. Unfortunately (on one level) it’s a eat or be eaten society, those that do not adapt will be on the short end of the stick nearly every time.

  • I personally would not go to a store that charged me a fee just to look around. I understand the reasoning behind this but if it’s a local business I’ll usually try to support them and I don’t mind paying a little bit extra. A national or global chain and there’s absolutely no way I’m stepping in, even with the intent to buy. There’s been plenty of times where I went into a store just trying to get an idea when I first started looking for an item but needed to do more research, and there’s nothing like being able to put your hands on it or see it in person, but the selections just weren’t what I was expecting.

    • John says:

      Great point JC! We do that ourselves as we start to narrow down and decide what we want, especially on larger purchases. I love supporting local business and do that often here and will pay the extra to support them…especially considering that we’re a small local business.

  • Michelle says:

    I heard about this entry fee too! It’s crazy and I would never pay.

  • I wouldn’t pay a showrooming fee unless the store was amazing. Like with bikini clad cocktail servers amazing. At that point, I’d be more interested in the experience and probably no so interested in the TV or whatever other product I was there to look at.

    • John says:

      Lol! I think Mrs. Frugal Rules would have an issue with me going into a store like that. 😉 I hear ya though, it would have to be something along the lines of a great experience to get me to even consider me paying a fee like that.

  • Great list of blogs articles. I read most of them earlier this week and concur that they are worthy of a read if you haven’t already done so.

  • I would never pay the $5 “just looking fee” unless I was just looking at Brad Pitt 😉 Don’t worry about the price checking on the cell phone thing because I do it all the time too! Thank you for including my post sir! Have a wonder Easter weekend with your family!

    • John says:

      Lol! Can’t say that I would pay to look at Brad Pitt, but I get your point. 😉 Yea, I do it all the time and can’t wait til Mrs. Frugal Rules does the same thing with her new iPhone, I’ll have fun ribbing her about it. 🙂 You have a great weekend as well!

  • I am sure that business will either lose most of it’s customers or will change back because people will not pay that price unless you are selling something very unique. If you were doing that though, you wouldn’t have to worry about showrooming. It was a rash decision that probably won’t do any good.

    Thanks for including my post John. I really appreciate it. Have a good weekend.

    • John says:

      I would tend to agree Grayson. They’ve already received some pretty serious push back and hopefully will see it be gotten rid of…otherwise I think the risk is high for them to lose a lot of business.

  • I can certainly understand the pressure but putting a fee on people who want to come in a showroom is ridiculous and I believe will only make things worse for the already competitive retail market. If consumers are already busting it to save money where do they think they are going to make money from these people? I don’t think it’s going to work in their favour at all. Time will tell. Have a Happy Easter mate and thanks for showing your support for CBB by linking up and being a part of my FB community. You are a true friend and blogger and I applaud you for selflessly stepping up the way you have outside of the box. I’ll always remember that. Cheers my friend! Enjoy all the choccies this weekend!

    • John says:

      I agree Mr. CBB, I understand the pressure but this fee is just asinine. At the end of the day the consumer has the right to exercise wise judgment and need to do what’s best for them.

      No problem on the share, you know I am a CBB groupie. 😉 Have a great weekend as well sir!

  • krantcents says:

    Thanks for the links, I am in good company.

  • Great links! Have a good weekend, John.

  • Bestbuy is ultimately doomed! They might linger around for a couple more years but as we move further into the digital age Amazon will claim victory over all big box retailers.

    • John says:

      I think you just might be right Marvin. I think if they would have made a change five years ago or so (especially after the Circuit City downfall) they might’ve had a chance, but they missed their chance in my opinion. It’ll be interesting to see how much longer they stick around and what it does to the landscape in that market space.

  • Mackenzie says:

    I too, am surprised that Best Buy is still around honestly. Only time will tell, I guess!

    Thanks for the mention John! Happy Easter 🙂

    • John says:

      Same here Mackenzie. I think it’s probably only a matter of time for them unfortunately. You have a great weekend as well Mackenzie!

  • Certainly I understand the frustration experienced by the owner of that business, but I believe that “cover” charge is really going to backfire. Rarely am I a showroom shopper, but I certainly would not step into a place just to look if it took money on out of my pocket! Why give away five bucks if I might not like what you have?

    As for Best Buy, it is only a matter of time before they fail. They failed to leverage their advantages, especially in the wake of Circuit City’s demise.

    • John says:

      I can understand the frustration as well, but I agree that it will backfire. It already has to some extent, but last I read the business owner is still sticking to his guns. Running a business myself I know how vital it is that you be willing to adapt. If you don’t, it’ll likely be the death of your business.

      That’s a great point about the Circuit City demise! I think that gave Best Buy a real opportunity, but they whiffed big time.

  • Haha, love those search terms. They crack me up every week.

  • Wow – that’s a ballsy, yet ill-conceived idea. I understand his annoyance at customers showrooming. But to charge people to enter – on per principle I would chose to shop and buy elsewhere. I don’t know what he was thinking. Some of the posts you selected are new to me, so I’ll definitely have to check them out. And I love the search terms. Hehe. Always interesting. 🙂

    • John says:

      I agree Shannon! I would very likely just go elsewhere solely based off his lunacy. I know showrooming can make it difficult for retailers, but it’s called adapting. Glad I could direct you to some new posts for you. Have a great weekend!

  • Jose says:

    Everyone should boycott that store. As a matter of fact, they should form a line in front of it demanding that they be paid $5 to go in and browse! I guess that would never fly but it would send a nice message to the store owner! I love the search terms, Hilarious!

  • Justin says:

    I’m with Jose. That’s got to be one of the worst ways to actually run a business. I don’t even like paying to enter an amusement park or movie theater. I definitely wouldn’t pay to enter a store.

  • It makes me think that this guy is trying to run a museum of some sort. To me it just seems like a bandaid solution a problem that retailer is having because a) they don’t have the kind of products consumers are looking for b) their pricing isn’t competitive c) they aren’t providing a great service experience for their customers that makes them feel genuinely appreciated for making there purchases at the store itself. I would never step foot in the place if I had to pay…probably would just send me straight to amazon.

  • I’m completely put off by cover charges at bars (unless there’s a live band or something special happening). I’ve actually refused to go with friends if they’re going somewhere with a cover (I know I’m probably unusual). I definitely wouldn’t pay a charge to “look” at a store. “You” the business owner should be selling something that will bring me in. If you don’t have something I want and you’re going to charge me to enter your place of business, I wouldn’t go in period. Strange.

    • John says:

      Great point KK! I would agree that as a retailer, you need to be selling something that will draw people in and not causing them to jump through hoops with a charge.

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