The Myth Of The MSRP

If there’s one thing online shopping provides that in-store browsing doesn’t, it’s the opportunity to find the right product at the right price. But evidence is emerging that the right price might just be designed to look that way.

The New York Times published another story in a string of ones focused on breaking apart the nebulous concept of the manufacturer’s suggested retail price (MSRP) or list price that online retailers like Amazon prominently display with strikethroughs to highlight just what a great deal the price they sell at really is. Different merchants can seemingly set different MSRPs (and advertise different amazing deals accordingly) with no apparent oversight, and while courts have consistently sided with retailers on the basis of buyer beware-type logic, consumer protection groups call the practice a blatantly deceptive way to drive higher sales.

“Ask any consumer: ‘Would you like to be manipulated into purchasing anything you would not otherwise buy?’” Bonnie Patten, executive director of TruthInAdvertising.org, told NYT. “My guess is the answer would be no.”

Much like baggage fees on airlines, less-than-truthful MSRPs aren’t limited to the big dogs of online retail but rather are an endemic process of the medium. Guru Hariharan, CEO of Boomerang Commerce, recommended that online shoppers divest themselves of the notion that the MSRP is anything suggested by the market or even a retail price at all but rather a conglomerate of a dozen factors that go into the final sale figure.

“Pricing can be complex,” Hariharan said. “In some places, it’s highly transparent. But there are others where you have to do the math. You have to check the impact of shipping costs, promotions, coupons and loyalty rewards.”

It seems that just to find out what online retailers are really selling something for, shoppers need to be as savvy with running a business as the merchants are themselves.