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I have recently discussed the issue of consumer fraud, so this time I would like to cover the other side – vendor fraud. There are quite a few games that vendors play to either bilk you out of your hard earned cash, or to trick you into buying from them. Some of these are merely irritating, while others are outright illegal.
The majority of our customers have indicated that they are very happy with the service and prices that we offer (though we never have claimed to be the cheapest). In a number of these discussions, emails, etc., these customers have provided some insight into the practices of some other vendors which has caused them to look at factors other than just price when purchasing. A few of these are amusing, but some are downright scary. I will be outlining some of these practices, though I can’t really name any specific vendors that engage in them. Suffice it to say that there are some fairly major names that have been referred to by customers – some of which surprised us!!
In all fairness, there are many, many legitimate vendors in business today, and the few crooked ones tend to give the rest a bad name. Some vendors engage in two or three of these practices I am listing, but are up front about it, so it really isn’t trickery. A few vendors, however, engage in many, or even *all* of these, and continue to do so even when ‘caught’ at it. Their prey is the ‘newbie’ or the person who just has to have the item right now so he doesn’t really do enough research.
The Top Ten Stupid Tricks Vendors Pull
Stupid Trick #10 – This one is fairly benign, but its purpose is to ‘trick’ you into visiting the vendors site first. Essentially, what the vendor does is to ‘seed’ the various price lists around the internet with the lowest price they can – sometimes even below what they purchase it for. When you find these prices and link to their site, you find that the price is actually higher than what was in the referral site. If you question them, you will usually get some story like “that was last weeks price”, or “it was a typo”. The reason vendors do this is to get you to visit their site before anyone else’s in the hopes that you will buy anyways because going back and checking more prices is too much trouble
Stupid Trick #9 – Some companies appear to purposely send the wrong product out in an attempt to keep the sale. Usually the product is merely a different model number (perhaps with less cache, or a slightly lesser performing model) than the customer ordered, but it is sufficiently close that shipping costs and hassles to return it may be more than it is worth. While sometimes legitimate mistakes are made, we have heard of this happening from the same vendor(s) too many times for it to be accidental (IMHO). The likely reason is that the vendor advertised a product, but ran out of stock or simply didn’t get the expected shipment so rather than lose the sale they promise one item and ship another, similar item.
Stupid Trick #8 – Since the majority of consumers are looking mainly for the lowest price, some vendors will set their prices low enough to be attractive, but then overcharge on shipping to make up for it. This is not necessarily a bad thing, as long as the vendor is up front about the charges. The reason they do this is because many people order based upon the product price, and consider the shipping to be ‘separate’. I have personally talked to people who actually admitted this, and also admitted that they sometimes pay more as a result.
Stupid Trick #7 – Since maintaining inventory is costly, and potentially disastrous (if prices take a sudden tumble), there are a number of vendors who actually do not stock product at all (or very little). What they do is to order only what they need to make their shipments. This is OK if the vendor actually tells the customer this, but many times the customer is told that configuring or testing the product for 48 hours will prevent shipping for a few days. This gives the customer a ‘warm and fuzzy’ feeling that the vendor is actually taking care of them – but it seems pretty unlikely that a vendor that ships 20, 30, 50 or more packages every day can afford to test products (such as motherboards) for two full days. This would require enough test stations to cover two full days of product orders – up to 100 stations or more!! The more likely reason they make these claims is so that they have two full days to get the product shipped to them, they test it for a few hours (or minutes) and then ship. This is called ‘just-in-time’ ordering, but that’s really stretching it. Just-in-time really means you plan so well that your inventory comes in on the day you need it (a pretty tough thing to do!!). Trick #4 is sometimes used in conjunction with this.
A similar tactic is to ‘batch up’ customer orders until a sufficient back order quantity exists that the vendor can get more favorable prices. For example, the vendor may advertise a very low price for a product, then start accumulating orders for a few days. When the backlog gets to be large enough (say 50, 100 or more), the vendor then orders a large quantity. This is because many distributors have a fairly significant price break on quantities of 100, 500 and 1000. The vendor will usually use trick #4 to acquire the money to pay for this scheme. When a vendor engages in this practice, the customers who order the first few days get ‘delayed’ shipments, then when the product actually arrives at the vendor’s location any ‘new’ customers who call get shipped immediately. This tends to minimize the damage when people go out and complain on the newsgroups. A few will complain about delays, long delivery times, etc., but then others will post that theirs came “in only two or three days”, thereby sort of ‘offsetting’ the complaints.
Stupid Trick #6 – This is another variation of the last two, but is a bit more crooked, in my opinion. This is where a vendor will announce that they have a ‘newly released’ product before anyone else, such as a brand new revision of a motherboard or CPU. In this case, the vendor knows that the product really won’t be released for a few more days, or perhaps a week, but is advertising in anticipation of receiving the product. This causes a flood of people to call and order the non-existent item, and prevents them from buying from another vendor – even if the price ends up being lower when they actually get the product. On more than one occasion, we have been told by the manufacturer that the product is not yet in the U.S., but customers will call and tell us that vendor XYZ has them ‘in stock’. Of course, sometimes these same customers call back two weeks later and complain that the vendor never shipped, or made some lame excuse. This one is also used in conjunction with trick #4 in many cases.
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