Canada has implemented a new tax savings from December to February for some things like taxable groceries, crafts, and gaming physical media. I wanted to get a new Xbox controller and found the best price at Walmart for $55 a week ago. The tax holiday starts today and I now see that the $55 has increased to $62 and change, which is about how much tax I should be saving. Great to see this thinly veiled attempt to help Canadians ( /s - win votes) is just going to be extra profit in the corporations’ pockets.
I don’t say any of this to say that I think what Walmart is doing here is ethical, onky to say that it is logical from their standpoint if they assume there won’t be any blowback.
Companies charge what they think they can get for a product. The tax is part of the price. If they think an item will sell for $5.26 including tax, it is reasonable for them to think it will still sell for $5.26 if the item isn’t taxed.
That isn’t to say this is nice on their part, but the current system doesn’t incentivise them to be nice. It incentivises profit.
It does seem like they took the easy route to gain more profit. It is likely that, in the a absence of tax, their profit would be maximized by a price that is somewhere between the old pre-tax price and the old post-tax price.
Working behind the scenes with retail pricing (not Walmart) I can say this is 100% how it works.
Also have been given a sheet listing all of my department’s products that were below a specific profit margin. Told that we had a sale coming in 2 weeks so make sure to raise prices on those before then so that I didn’t have a drop in my overall department sales. If the customers noticed and asked, we were to inform them the ‘sale’ was to offset the price hike that just happened because we were looking out for them.
Raising prices then advertising a “sale” at the same/higher price IS actually against the law though. Unfortunately we have terrible enforcement of these laws but they do exist:
https://competition-bureau.canada.ca/deceptive-marketing-practices/types-deceptive-marketing-practices/ordinary-selling-price
Is it against the law if they legitimately don’t lower the price after though as the above poster is being told to give as a reason, but we know isn’t true?
Yeah. Calling something a sale at a price that’s not actually discounted under the regular price (with some caveats on how long it needs to be at said regular price), then yeah it’s a violation of the act. Basically false advertising.
Bumping up the regular price to cover what you’d have otherwise saved on tax is dickish but not against any regulations AFAIK
Yeah, I shouldn’t have been surprised. This is normal psychopathic behaviour for a corporation.