Best Buy just got an Uber-sized lesson in surge pricing, and how not to do it.
Hoping to capitalize on the (reportedly) pent up interest in the iPhone X, Best Buy, which also sells all iPhone models via carrier installment plans that let customers pay for the devices over several months, decided to hike the full, upfront price by $100, with the retailer charging $1,099 and $1,249 for the two iPhone X configurations; Apple’s pricing is $999 and $1,149.
Danielle Schumann, a spokesperson for Best Buy, tried to explain the fact that the company is overcharging for the iPhone X in a statement to Bloomberg, which courtesy of The Verge is included below for its sheer ridiculousness.
“Our prices reflect the fact that no matter a customer’s desired plan or carrier, or whether a customer is on a business or personal plan, they are able to get a phone the way they want at Best Buy. Our customers have told us they want this flexibility and sometimes that has a cost.”
In other words, Best Buy was under the impression that its customers would like to pay more to buy phones from it, as opposed to the cheaper retail cost offered everywhere else the iPhone X is sold.
That impression was dead wrong.
As Bloomberg reports today, Best Buy has stopped some sales of the iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already record expensive smartphones.
Fast forward to today, when a much less funny Danielle Schumann makes a repeat appearance:
"Although there was clearly demand for the un-activated iPhone X, selling it that way cost more money, causing some confusion with our customers and noise in the media. That’s why we decided a few days ago to only sell the phone the traditional way, through installment billing plans."
By then it was too late, and last week consumers took to Twitter to slam the completely unwarranted surcharge: "Never buying from you again," one Twitter user wrote. "Charging $100 premium due to demand is treating your customer like dirt."
Whereas Best Buy would get rebates from carriers when it sold phones that are already set up to work on the carriers’ networks, it doesn’t get that money when devices are sold without carrier activation. And yet, Apple, carriers and some other retailers stick to the official pricing. Best Buy thought it was better, and the result is the blowback it is facing now.
Then again, perhaps it still hasn't learned its lesson: a check on Best Buy's website shows that the retailer is still selling older iPhone models, including the iPhone 7.... at a $50 premium.