From airfares that were too cheap to be true to delays in Santa’s delivery schedule, here’s a rundown of the week’s best and worst news from the business world.
Delta (DAL) — Loser
Folks hoping to save on post-holiday travel must have been pinching themselves on Delta’s website on Thursday morning when they saw fares for as little as $5. It was a glitch. Delta caught it, shut down its site, and fixed it. However, there were still plenty of folks booking roundtrip flights for just a few bucks.
Delta knows that it would be disastrous to cancel all of the bookings. It will honor the lower fares. However, in a cutthroat industry where fares mean everything the move could hurt Delta’s bottom line on flights that would’ve filled up with folks willing pay full fares. Kudos to Delta for doing the right thing, but it still wound up making a costly mistake this week.
Amazon.com (AMZN) — Winner
Retailers typically take days to let the market know how the holiday shopping season played out, but Amazon waited only until the day after Christmas to gush about its accomplishments.
In a press release on Thursday Amazon detailed its success during the critical season.
It sold enough Hot Wheels cars to cover the entire length of Daytona’s famous speedway. It sold enough running shoes to outfit all of the runners of the 10 largest marathons.
Amazon is prone to use this kind of colorful language, but those looking for hard numbers would be impressed to learn that during the third week of December a million people signed up for Amazon Prime — the online retailer’s loyalty shopping club that provides a year of subsidized deliveries and online perks for $79 a year. It also sold a record 36.8 million items worldwide during Cyber Monday.
Yes, Amazon is still the top dog of e-tail.
UPS (UPS) and FedEx (FDX) — Losers
Amazon may have been the big winner of the holiday shopping season, but the parcel delivery specialists aren’t looking so hot. Several orders placed for shipped deliveries failed to arrive on time by Christmas Eve, and the brunt of the blame seems to be falling on UPS and FedEx.
There’s always a little bit of Grinch in every online retail Christmas, but this week the shortfalls seem historically significant. Too many people were placing last-minute orders slamming the UPS and to a lesser extent FedEx fleets.
As traditional retailers continue to offer online sales to folks wanting to avoid heading out to crowded malls it’s a safe bet that online retail will continue to gain in popularity. UPS and FedEx better make sure that they are ready for even more orders next December.
Chromebooks — Winner
Google’s (GOOG) foray into netbooks hasn’t been as successful as its Android mobile operating system for smartphones and tablets, but it seems to be gaining in popularity as a cheap alternative to MacBooks and Windows-fueled laptops.
Amazon’s press release offered up its hottest sellers, and in the laptops category two of the three bestsellers were Samsung Chromebook and Acer Chromebook. It’s easy to see the appeal of the portable devices running the Web-based Chrome operating system. They’re cheap, starting at less than $200. They naturally don’t run Windows, but apparently there are plenty of people that have steady online connections and don’t need to play Windows-based PC games or run Microsoft Office. This could be why Microsoft (MSFT) was pointing its anti-Google Scroogled marketing campaign at the Chromebook in recent weeks.
McDonald’s (MCD) — Loser
Activists won’t have McDonald’s McResource Line website to kick around anymore. The fast food giant is shutting down the website after another embarrassing incident. Reports indicate that the internal website dedicated to helping McDonald’s employees recommends that they don’t eat too much fast food so they don’t get overweight.
McDonald’s counters that the comments were taken out of context and that it has beefed up its selection of healthier offerings including salads, oatmeal, and smoothies. Either way, this wasn’t the first time that activists pushing McDonald’s to pay its employees more found ammo within the chain’s internal resources.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, FedEx, Google, McDonald’s and United Parcel Service. The Motley Fool owns shares of Amazon.com, Google, McDonald’s and Microsoft.
In the wake of a number of high-profile cruise ship disasters, the cruise industry announced this week that it had approved a passengers’ bill of rights. The document, which the industry says will be legally binding, mainly concerns passengers’ rights in instances where a ship has become disabled.
It resembles a similar bill of rights for airline passengers that the Department of Transportation drew up in 2011. Those rules concerned procedures for dealing with lengthy tarmac delays, lost baggage, and similar issues.
That got us thinking: If cruise ship passengers and air travelers have their own bills of rights, why shouldn’t shoppers?
Sure, visitors to retail stores typically don’t encounter situations as maddening as being stranded on a floating hotel where the bathrooms don’t work, or trapped in a cramped coach-class seat while their flight sits on a tarmac for hours. But the shopping experience is still riddled with frustrations, and less-savvy shoppers are often taken advantage of by dodgy pricing, pushy salespeople and inconsistent policies.
We’d love to see a self-policing effort by the industry to assure shoppers that they can expect certain standards of treatment when they walk into a store. Here are a few things we would include in a shopper’s bill of rights.
When retailers run sales and coupons, they include fine print that limits what the deal actually applies to. In most cases, it’s relatively harmless — it defines the effective dates of the promotion, and may exclude select items like gift cards and jewelry.
But problems arise when retailers go totally overboard and try to exclude half the store. Department stores like Sears (SHLD) and Macy’s (M) tend to hold sales that exclude dozens of brands from the discount, and earlier this year Guitar Center took some heat for a coupon that excluded more than 300 brands.
Sure, in a perfect world everyone would read and understand the fine print. But it’s not unreasonable for someone to see “20 percent off everything” and assume that it applies to most of the merchandise in the store.
Photo: Consumer Media
It’s bad enough when there’s a ton of fine print in the ad. It’s even worse when store employees are inconsistent about applying those terms.
The other day I was shopping at Banana Republic (GPS), which was having a 40 percent off sale. I found an item I liked and confirmed that it wasn’t excluded in the fine print, but a cashier insisted that the discount did not apply. Only when I threatened to leave empty-handed did she check with a manager and apply the discount.
It’s understandable that the price of certain big-ticket purchases — cars, TVs, and so on — will depend in part on your ability to successfully haggle down the price. But whether or not a store fairly applies the terms of a deal should not be contingent on your willingness to make a scene.
Photo: nichole.c, Flickr.com
It’s not just the fine print on coupons that’s often left to the interpretative whims of cashiers and associates. Corporate policies on everything from returns to price-matching are often poorly understood or selectively applied by front-line employees.
In our review of store price-match policies, we noted a report from Cheapism that found that some stores were inconsistent in their application of those policies. At Walmart (WMT), for instance, cashiers insisted on seeing competitors’ ads to perform a price-match, despite a company policy that explicitly says that you don’t need to show them.
We know it’s not easy to educate every last employee about every last policy, especially at an enormous company like Walmart. But those policies don’t mean much if the people who have to follow them haven’t read them. Which segues nicely into …
Photo: Walmart, Flickr.com
Retail employees also need to be informed about the products they’re selling, so that they can give accurate advice to shoppers.
That means if you’re buying a TV, you have the right to an employee who can tell you the difference between plasma and LED. If you’re buying a bra, you have the right to a saleswoman who can properly fit you. If you’re buying a computer, you have the right to a salesperson who can tell you whether or not you really need to pay for an antivirus program.
Having smart salespeople makes good business sense for retailers — Best Buy (BBY), for instance, has realized that well-informed customer service is one of the few advantages it can wield over online competitors. But it’s also a matter of consumer rights: If you’re misled into buying the wrong TV, bra or software product and then find that you can’t return it, that’s money out of your pocket.
“Is there anything I can help you find?” is no longer the only question you’re asked at a retail store. Store associates and cashiers may ask you to sign up for store credit cards and rewards programs; upon checkout, they might also ask for your zip code and email address.
Of course, you have every right to say no to these questions. But sometimes they won’t take no for an answer — I have dealt with pushy associates eager to get commissions on credit card applications, as well as cashiers insisting that I reveal my email address.
But giving them your email address invariably means getting marketing emails, and your zip code can be used to locate you and send you catalogs. Meanwhile applying for a store credit card can temporarily lower your credit score. Shoppers should be notified of the downsides involved with saying “yes” to any of these questions. And salespeople shouldn’t be allowed to pressure you after you’ve said “no.”
There are a lot of things we wish retailers would do better. We hate having to wait in long lines at checkout, for instance. We hate that every retailer has its own return policy to pore through, with various exclusions and time limits. And we wish retailers didn’t feel the need to hand us a mile-long receipt covered in promotions and surveys when we’re just buying a pack of gum.
We left those grievances out of our proposed bill of rights, because this isn’t meant to be a shopping wish list — the focus here is on basic standards of fairness and honesty that will protect the shopper.
Still, we may have missed a few. If there are certain rights that you feel every shopper should be guaranteed, we’d love to hear about it. Give us a shout in the comments or send an email to Matt.Brownell@teamaol.com.