Last week in it’s ruling on LEEGIN CREATIVE LEATHER PRODUCTS, INC. v. PSKS, INC., theÂ USÂ Supreme Court took the position that anti-trust laws are not designed to protect the consumer, but instead, manufacturers.Â Here’s an excerpt:
A single manufacturer?s use of vertical price restraints tends to eliminate intrabrand price competition; this in turn encourages retailers to invest in services or promotional efforts that aid the manufacturer?s position as against rival manufacturers.
It goes on to explain how locking prices into tiers supposedly benefits the consumer:
Resale price maintenance may also give consumers more options to choose among low-price, low-service brands; high-price, high-service brands; and brands falling in between.
What’s wrong with high-service brands without the high-service overhead at the low service price?Â The court explains that as well:
Absent vertical price restraints, retail services that enhance interbrand competition might be under provided because discounting retailers can free ride on retailers who furnish services and then capture some of the demand those services generate.
I agree that customer service in discount stores is minimal, but considering that service in general is so abysmal, I’m happy to bypass it and I don’t think I’m alone.
When I shop, I go for a combination of the best product for the least money with the least time spent obtaining it.Â I’m resigned to the fact that any additional services will require phone/email contact direct to the manufacturer.Â For me, the best thing retailers can do is stay out of my way and let me give them my money for the product I want as effortlessly as possible.
For example, I judge my ideal retail serviceÂ experience on a visit toÂ Roush Hardware in Westerville, OH (sometime in the autumn of 1997).Â They operated with a sort of proactive zone model.Â As a customer enters the store the greeter asks you if you’re looking for anything specifically.Â In my case, it was a bolt for my license plate.Â The greeter pointed the appropriate aisle out to me and paged an associate who met me in the aisle.
The guy knew exactly what kind of fastener I needed and grabbed a few, along with a screwdriver.Â He walked me out to my truck and installed the bolts to make sure they’d fit, and when they did I went back inside and paid.
I’m sure I could buy discount bolts somewhere, but the court is clearly wrong that I would bypass the service I received for bolts that wereÂ few cents cheaper.
The ruling dealt with shoes, and since I’m married, I’ve had plenty of opportunities to observe shoe shopping.Â My wife tends to go shop for shoes that she needs to be comfortable at stores that offer better service.Â When she wants shoes for style, she shops at stores where she can be left to dig through thousands of deeply discounted shoes from a variety of brands with nobody to bother her – sometimes even online.
The court would have you believe that it would somehow benefit my wife to artificially inflate the prices at discount shoe warehousesÂ and drive her to more intimate mall retailers.Â Our household budget says otherwise.Â
Presently she can afford brand name style and qualityÂ at closeout prices, and that’s the best of both worlds.Â The court’s position illustrates clearly that the law here is designed to protect business at the expense of consumer choice.Â That’s something to consider next time someone becomes defensive about big-government anti-trust laws framed as a consumer protection.