Updated July 4, 2013
OK, so you’ve done your research and picked the right HDTV for you. Now how do you get the best deal? LG, Toshiba, Samsung, Sharp, and Sony all have unilateral pricing policies (UPP) which means they set the lowest price an authorized dealer can sell a given TV. There are only three ways to save on a UPP priced HDTV, and one comes with risks.
We reveal all the information after the break.
Method 1
Simply wait. The longer you hold out for a particular make/ model, the less expensive it will be. TV manufacturers enact new dealer programs, such as instant rebates, to have lower UPP selling prices. In July and August TV makers use these limited time “programs” to adjust inventories on models not moving as fast as forecast.
The start of the TV selling season “officially” begins with the opening day of the new NFL football season, which this year is September 5th. This is the time of year when the majority of TVs are sold. This TV season also, logically, ends Superbowl Sunday (February. 2, 2014). Generally, there aren’t as many “huge” deals during this time, largely because of UPP. After Superbowl, though, it’s clearance time. Manufacturers show their 2014 models in early January, so once the Superbowl is over, manufacturers (and retailers) want to empty their shelves to make room for the new models. So the longer you wait, the better deal you can get. Though on the other hand, it’s that much less time you’ll have to enjoy a new big-screen HDTV experience.
Method 2
Buy the TV on-line, out-of-state, and pay no sales tax on your TV order (in most cases). Many states collect sales tax, but have no system for out-of-state etailers. There is a bill sitting in the US House of Representatives that will require collection of sales tax for these type of sales, but it has yet to come up for a vote. We don’t know how long this situation will last.
We do know of a few exceptions. Currently Amazon, one of the largest on-line TV sellers, collects sales taxes in the states of AZ, CA, CT, FL, GA, IN, KS, KY, MA, MD, MN, NV, NJ, NY, NC, ND, PA, TN, TX, VA ,WV, WA & WI. Companies with an in-state presence such as Best Buy and Wal-mart will collect sales tax when you buy on-line.
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Method 3
Buy from an unauthorized on-line dealer. This method can get you a lower price than the official UPP. However, it’s also fraught with risks. Here is how it works.
You go to the website of an unauthorized dealer and see the hottest selling TVs at or near dealer cost (and far below the UPP of authorized sites). On top of that, the dealer is offering free shipping! Our poster child “unauthorized dealer” might even offer an extra “$15 customer appreciation discount.” If don’t live in, let’s say, New Jersey (where our imaginary dealer is located), you also might be eligible for our Method 2: no sales tax (in states that collect it).
How can these unauthorized dealers sell at such low prices and make a profit? Well, they can’t, and this is where things get interesting.
What they don’t want you to know
Over the last few decades, many unauthorized dealers have come and gone (out of business). In the 1960s, there was 47th Street Photo that sold unauthorized parallel imports known as “gray goods,” such as cameras and consumer electronics. They went bankrupt in 1992. According to a NY Times article they still are out of business, but the name lives on: it was licensed in 1995. Abe’s of Maine, a New Jersey unauthorized dealer of HDTVs and other electronics, filed for Chapter 11 bankruptcy protection on Nov. 5, 2012. We called them last week and told us they have not yet emerged from the bankruptcy. We do not recommend purchasing anything from a company in this situation.
A good example of an unauthorized HDTV dealer is East Coast TVs (ECTV) in Linden NJ. The posted price on its website for the top rated Samsung PN64F8500 plasma TV is $2529 (see web listing above). The home page also states “free shipping on everything.” By comparison, Amazon Direct is an authorized Samsung dealer, and therefore must abide by TV makers UPP pricing. It offers the same Samsung 64-inch PN64F8500
for $3397.99 with free enhanced shipping (inside, uncrated delivery), plus 14-day price protection, 30 day returns with free return freight, 2% Amazon rewards and a free Samsung soundbar under a current promotion. Not including any sales tax, (or the free soundbar value) buying from ECTV represents a savings of $868.99, or about 25%. The problems: East Coast TV does not offer returns at all on 50-inch or larger TVs. Worse, according to our investigation, you will never get the TV to your house at the East Coast TV on-line listed price!
Here’s how they do it: Low-Ball Explained
When you “purchase” a TV at this ultra-low price, you’re really just placing an order. The dealer cannot deliver the TV at the advertised price, and has no intention of doing so. If they did, they’d will lose money on every sale and quickly go out of business. In our example, with ECTV, the prices the website are near dealer cost. All stores have expenses, though, that make such margins untenable.
First they must pay the authorized dealer a profit. That’s where they’re getting the TVs, from a somewhat-shady authorized dealer that’s selling to the unauthorized dealer near cost. They also need to pay for the “free” shipping and the 2% (or so) for the credit card processing. At best, at the prices they’re usually charging, they’re making next-to-no profit, or are pricing TVs at a slight loss.
So how do they make this work? To make the sale profitable, a retailer like ECTV must up-sell you with two or more additional charges. If you refuse to buy the extras, you will never get the item.
We’ve used ECTV as an example, because they have a track record of delivering to consumers new HDTVs, but also numerous complaints at consumer affair websites and forums. Here’s what always occurs after you place your order from East Coast: Customers either get an urgent email to call them regarding the order or a phone call. They’re informed they must pay for “mandatory shipping insurance.” There is no mention of this on ECTV’s website order page or shopping cart page. It is listed on the ECTV’s “help” page. It reads:
“How much money does shipping insurance cost? We do charge shipping insurance on select merchandise being delivered to select locations. For the most accurate delivery quote call 866.496.5784 to speak with a sales representative.”
We called ECTV and were told it’s 2% of the purchase price. However, others have been charged more and less. We’ve read a complaint about a customer told 2% but got charged 3.5% of the item price on their credit card. Our guess is the salesman arbitrarily comes up with the number, then moves on to other up-sell items. If the total gets the price high enough for ECTV to make a profit, they will ship you the TV to you. If not, they don’t.
The second additional item is what they call “enhanced delivery,” telling customers that the standard free shipping takes weeks and is only curbside delivery. For a few dollars more they can get the TV within a week and the driver will carry the TV to the room you want, unpack it, allow you to inspect it for shipping damage (such as dents or a cracked screen), and plug in the power to verify the TV works. An ECTV salesman quoted HD Guru $99 for the enhanced delivery, although we would like to stress we did not place an order so we don’t know what extra charges would occur if we actually ordered the TV.
What about the shipping insurance?
When we asked the salesperson at ECTV about shipping insurance, they told us it insures against lost and damaged products. However, their website expressly states:
“Upon delivery you, the customer will inspect and test your merchandise for any physical damage or defects. If you find your products to be damaged or defective in any way, the delivery may be refused and replacement merchandise will be shipped to you right away. If the item is delivered and it is not defective or damaged, you will be required to sign the delivery manifest which states the items were delivered in good and working condition. If you have a problem after the items are delivered and the delivery manifest has already been signed we cannot accept a return on the item.”
Since this appears to be in complete conflict with the mandatory “shipping insurance,” we asked the ECTV representative to provide a copy of the insurance policy listing the name of the insurance company, along with the terms and conditions. We were told they do not have one, and we should contact AM Home Delivery, the trucking company ECTV uses for the policy information. We did, and were told they do not sell “shipping insurance” and we should speak to East Coast TVs.
Instead of calling ECTV back, we called the New Jersey Department of Insurance and asked if “shipping insurance” is indeed a form of insurance and if so, if it falls under the state’s insurance regulations. A spokesman gave us a qualified “yes “ but would not elaborate.” We searched for a NJ insurance licensing webpage for the company and/or owner of ECTV on the NJ Insurance Dept. website. We also called the NJ Insurance Department’s representative. In both cases ECTV was not listed as licensed to sell insurance.
This morning we contacted the owner of ECTV, Isaac Barnathan by phone. He told us his shipping company, AM Home Delivery would send him a copy of the insurance policy and he would forward it to us. At publication time we have not received the policy and will update if and when it is provided.
It’s also worth noting that ECTVs requirement of purchaser inspection mandates the delivery company bring the TV inside your home, near an electric outlet, for unpacking, inspection, and for confirmation it powers up.
Other Up-Sells
Purchasers of HDTVs from East Coast are also asked to purchase an extended warranty and a wall mount as part of the up-sell. In each complaint and comment we found on-line about ECTV, all customers that actually received their purchase paid for the shipping insurance and the “enhanced delivery.” Many complaints state they were promised one week delivery with the “enhanced delivery” but received their TVs three to four weeks after ordering.
Why do folks order from a company that does not honor their website price and free shipping policy and don’t cancel their orders?
This is where buying psychology comes into play. If an unauthorized dealer beats the Amazon (or a local authorized dealer) price by $200-$300 on a $3400 TV, the seller will only get X number of orders. But, if the price is far lower than any other seller, the dealer will get many more orders. We’d all like to get the best deal, and that’s exactly what’s offered on unauthorized dealer websites.
But when the dealer up-sells, the consumer faces what’s known as “cognitive dissonance. “This is a feeling of discomfort caused by holding two conflicting beliefs. On one hand, the buyer wants to save money and get the best price. On the other hand, folks don’t like deceptive practices and the feeling they’re getting ripped-off, or being manipulated by a salesman to pay more.
It is a natural response to reduce or eliminate the discomfort. Consumers will give in to the up-sell so they can still feel they got a better price than anywhere else and eliminate the conflict. In a number ECTV consumer complaints, the salesman slightly reduced the initial price for the upgraded shipping or threw in an HDMI cable to convince the customer to take the new deal. It often works. Because ECTV and other unauthorized dealers aren’t shackled by UPP agreements, they are quite willing to make the sale for less profit.
Be Aware
ECTV offers an additional 2 percent discount. Clicking on the details we learned that even though you can enter the code and pay by credit card, the discount only applies to “paying by money order, certified check or wire transfer”. This is not worth the savings, by any stretch of the imagination. A credit card will protect you from charges if you never receive the merchandise from any on-line retailer . If one pre-pays (via money order, bank check or bank transfer) and you never get the product, you’ll have a big problem trying to get your money back, especially from an out of state dealer. We highly recommend you NEVER prepay any online merchant with a bank check, wire transfer or money order.
Any Alternatives?
On the avsforum, a few recent posts mentioned select Best Buy stores will match ECTVs price, while other Best Buys will drop the UPP price when confronted with the ECTV price. We know that a number of dealers point-of-purchase systems (the computers that ring up the sale) are locked out of entering any price lower than the current UPP. It appears (based on the forum’s postings) Best Buy’s system is not.
If you don’t want to take the risk of buying from an unauthorized dealer with deceptive practices, it’s worth a try at Best Buy, or at a local dealer, to get a price match to an unauthorized dealer’s price. It’s worth noting that East Coast TVs is not on the Best Buy’s official price-match list.
Conclusion
Be wary. Sometimes, the lowest price is not actually the best deal.
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