US consumers are heading in droves to cosmetics counters to pick up free stuff!
In the US, Macy’s, Bloomingdale’s, Filene’s, Lord & Taylor, Neiman Marcus, Nordstrom, and Saks Fifth Avenue have all settled a class action by agreeing to give away $175 million worth of cosmetics starting January 2009. No proof of purchase is necessary, but the freebies will be handed out on a first-come-first-served circus basis.
You see, these sneaky companies had been conspiring to sell at RRP only – never at a discount, and also coordinating promotions so they wouldn’t be in competition.
I wonder what the story is here in New Zealand? You’d think it would be super easy to conspire here, with fewer competitors. I couldn’t find anything on the commerce commision website or around though.
I remember hearing ages ago that comestic companies never discount their products because it could be seen to cheapen them. Instead they do “gift with purchase” specials, which gives people an incentive to pay full price for potentially unpopular products.
Strangely enough, gifts-with-purchase don’t actually end up making the companies more than they would if they discounted.
You do see individual retailers (e.g. Farmers, Kirks, chemists) discounting stuff at the end of a season, but never anything like “The great Revlon lipstick sale!” at all Revlon retailers.