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Unilateral Pricing Policy (UPP)

UPP

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#1 OFFLINE   trh

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Posted 27 July 2014 - 06:52 PM

I received an email today from 1800-Contacts.

 

 

In the coming days, 1-800 CONTACTS will no longer be able to offer discounts, rebates or price matching on many of our most popular brands of contact lenses.

A new policy, known as Unilateral Pricing Policy (UPP), is being implemented by many contact lens manufacturers. This policy regulates the lowest price we can sell their lenses for and will cause the overall price of contact lenses to increase with the elimination of sales, rebates and discounts.

In the next day or so, we will be sending you additional information as well as an opportunity to stock up on your brand using discounts and rebates before they are no longer available.

Effective Augutst 1, 2014, UPP will take effect on brands such as:

  • ACUVUE® OASYS®
  • ACUVUE® OASYS® for ASTIGMATISM
  • ACUVUE® OASYS® for PRESBYOPIA
  • 1-DAY ACUVUE® MOIST®
  • 1-DAY ACUVUE® MOIST® for ASTIGMATISM
  • 1-DAY ACUVUE® TruEye®

When I mentioned this to my wife, she said her eye doctor had told her the same thing last week (and that ordering her lenses from Sam's or BJ's or 1-800-Contacts would no longer save us money).

 

Later I did a Google search and saw that CNET.com and a number of other tech sites had articles about this last fall as the TV industry implemented the same policy. 

 

I also read that the Attorney General from Michigan released a statement that said UPP wasn't illegal.

 

I suggested to my wife her response should have been 'then write me a Rx for a different brand of contacts."



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#2 OFFLINE   peds48

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Posted 27 July 2014 - 07:49 PM

It looks like those are all from Johnson & Johnson.  I used Ciba Vison contacts that I get directly from my Eye Doctor.  He matches any advertised prices from known providers such as 1-800 contacts 


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#3 OFFLINE   dpeters11

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Posted 27 July 2014 - 07:53 PM

I would think a pricing policy within one company would be legal. Collusion with competitors would be where the issue would be I'd think.



#4 OFFLINE   peds48

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Posted 27 July 2014 - 08:17 PM

UPP may be the same as MSRP, which is the lowest a retailer could sell the "goods" for.


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#5 OFFLINE   James Long

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Posted 27 July 2014 - 08:21 PM

UPP may be the same as MSRP, which is the lowest a retailer could sell the "goods" for.


I thought the S was for suggested? Selling below MSRP (manufacture's suggested retail price) is common.
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#6 OFFLINE   AntAltMike

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Posted 27 July 2014 - 08:41 PM

I once heard that Janet Reno was the only person in America that insisted on paying the MSRP when she bought cars.



#7 OFFLINE   James Long

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Posted 27 July 2014 - 09:37 PM

I once heard that Janet Reno was the only person in America that insisted on paying the MSRP when she bought cars.


Probably not the only person, but certainly a famous person known for that choice. She wanted to make sure that nobody thought she was getting special favors due to her position with the government. Less famous people follow a similar standard of ethics without being noticed or recognized for the choice.
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#8 OFFLINE   Drucifer

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Posted 27 July 2014 - 11:00 PM

Price fixing across an industry is collusion and illegal.


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#9 OFFLINE   Eva

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Posted 27 July 2014 - 11:37 PM

It's like that with other products too.


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#10 OFFLINE   James Long

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Posted 28 July 2014 - 04:51 AM

Price fixing across an industry is collusion and illegal.


Are they colluding with other manufacturers or just setting a price for their company's products?
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#11 OFFLINE   Rich

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Posted 28 July 2014 - 06:52 AM

I would think a pricing policy within one company would be legal. Collusion with competitors would be where the issue would be I'd think.

 

Agreed, I find this pretty surprising.  Sounds like the onus will be on the makers of the lenses.  Reading the email, I gathered that the sellers had no choice in the matter.  Also smacks of monopoly.  

 

Somebody will sue the manufacturers, you can bet on that.  

 

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#12 OFFLINE   Rich

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Posted 28 July 2014 - 06:56 AM

Price fixing across an industry is collusion and illegal.

 

They must have found some sort of loophole.  Corporations don't just do things.  They do a lot of research and have large legal support, but they still overstep their bounds.  Lawyers aren't all that smart, they just act that way.  It will be an interesting lawsuit when it happens.

 

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#13 OFFLINE   Rich

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Posted 28 July 2014 - 06:57 AM

Are they colluding with other manufacturers or just setting a price for their company's products?

 

The email would lead me to believe the manufacturers are behind this.  

 

Rich



#14 OFFLINE   jimmie57

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Posted 28 July 2014 - 06:59 AM

The list posted is all One Company, not the industry. At least that is what I interpret it to be.

 

No telling how many companies do this.

I know that Samsung does not let stores advertise below a certain price for a product which is similar to this.


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#15 OFFLINE   dpeters11

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Posted 28 July 2014 - 07:02 AM

Probably not the only person, but certainly a famous person known for that choice. She wanted to make sure that nobody thought she was getting special favors due to her position with the government. Less famous people follow a similar standard of ethics without being noticed or recognized for the choice.


But to bargain on the price of a car isn't unethical. I seriously believe they price the sticker in expectation of it. Car dealers have established the entire dance around it. Saying "I'll have to see if the manager will go for that" etc.

Some on this forum claim that they do this at the grocery store. There it not expected, and if I don't like the price I simply do not buy unless it's something I need (and there are some things that I an not flexible on brand).

#16 OFFLINE   Rich

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Posted 28 July 2014 - 07:14 AM

The list posted is all One Company, not the industry. At least that is what I interpret it to be.

 

No telling how many companies do this.

I know that Samsung does not let stores advertise below a certain price for a product which is similar to this.

 

This is what I read and formed that opinion on:  A new policy, known as Unilateral Pricing Policy (UPP), is being implemented by many contact lens manufacturers. This policy regulates the lowest price we can sell their lenses for and will cause the overall price of contact lenses to increase with the elimination of sales, rebates and discounts.

 

Sure sounds like it's caused by various manufacturers.

 

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#17 OFFLINE   Rich

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Posted 28 July 2014 - 07:27 AM

But to bargain on the price of a car isn't unethical. I seriously believe they price the sticker in expectation of it. Car dealers have established the entire dance around it. Saying "I'll have to see if the manager will go for that" etc.

Some on this forum claim that they do this at the grocery store. There it not expected, and if I don't like the price I simply do not buy unless it's something I need (and there are some things that I an not flexible on brand).

 

Ever go to a Chevy dealer?  I recently went to one and was told, "We don't dicker about price, the price is on the window." That's happened to me before at Chevy dealers.  Needless to say, no new Chevy has ever graced my driveway.  I simply don't care what price they stick on the window, I've never paid the MSRP for a car.  I guess a lot of lemmings do, tho.  

 

People actually dicker at grocery stores?  How dey do dat?

 

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#18 OFFLINE   JosephB

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Posted 28 July 2014 - 07:57 AM

Just because all companies do something doesn't make it collusion. For example, all cell phone companies have usage caps, but they haven't colluded. Ever notice how airline prices always rise and fall together?

 

One company makes a move, publicly in the market, and the rest follow. That is completely legal. Sucks for consumers, but that's how capitalism works.

 

Another huge example of uniform pricing (and it's uniform pricing, not unilateral pricing) is Apple. You can only violate Apple prices within a few dollars. If you are an authorized Apple reseller and sell a computer or iPhone drastically under the MSRP, without their permission (they grant Walmart and other very large retailers limited permission to run short-run sales) then they will pull your vendor agreement.



#19 OFFLINE   longrider

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Posted 28 July 2014 - 08:00 AM

If this is just a new name for MAP (minimum advertised price) it is 100% legal. I deal with MAP policies a lot in my industry (powersports).  While it restricts what you can advertise it for once the customer comes into the store you can sell it for whatever you want.  MAP has been ruled by the courts as legal.  However restricting what an independent dealer can sell a product for proabaly will not hold up to review.  It has been struck down in other industries.


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#20 OFFLINE   trh

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Posted 28 July 2014 - 09:03 AM

Here is the CNET article I mentioned in my OP: http://www.cnet.com/...at-every-store/

 

And this from the AG of Michigan: http://www.michigan....44650--,00.html

And a few quotes from that page:

 

While it used to be that manufacturers could only suggest a minimum retail price, the U.S. Supreme Court recently changed that rule.  Now, manufacturers may, under appropriate circumstances, require a minimum retail price to be charged.

 

A manufacturer does have a legal right to set a suggested retail price (a manufacturer's suggested retail price or MSRP). The manufacturer also has the right to unilaterally terminate a retailer who prices below the MSRP.

 

Peds48 -- you said you use CIBA Vision contacts? They are listed as one of the contact lens companies that are implementing UPP. So your doctor's "price matching" won't be difficult when everyone is charging the same price.

 

An industry web site says UPP is good for the profession:  Offices can now focus on providing the best service/health care instead of just being the cheapest provider of lenses and UPP levels the field between the office that sells 4 pairs of brand X each year when compared to the office that sells 1000 pairs.

 

EDIT: Added the MI AG link


Edited by trh, 28 July 2014 - 09:04 AM.


#21 OFFLINE   Getteau

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Posted 28 July 2014 - 09:34 AM

When my ex-wife worked in the jewelry business many, many moons ago, a few of the collectible companies did that.  I know the store she worked at lost their Hummel license because the owner would advertise and sell below their allowed price.


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#22 OFFLINE   longrider

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Posted 28 July 2014 - 09:52 AM

I was not aware of that Supreme Court ruling, I just learned something.  In all honesty as a retailer I would not complain if that policy extended beyond TVs and contacts.   The "race to the bottom" in pricing is killing retail in two ways. First the buying power of large stores allows them to price lower than 'mom ans pop' stores which in many cases drives the little guys out of business.  Then the lower overhead of online operations allows them to price lower than even the big stores.  This does hurt the customer in areas where product knowledge is important.  I will use my industry (powersports) as an example, most customers do not know how a helmet should fit or how and why a $200 drive chain will give you 3 times the life of a $120 drive chain.   Without the help of someone with product knowledge , which fortunately in my industry only happens in online sales unlike the lack of help in big box stores, you would have an ill fitting helmet which will not protect you properly or spend almost double on 3 cheap chains instead of one good one.


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#23 OFFLINE   dpeters11

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Posted 28 July 2014 - 10:01 AM

Ever go to a Chevy dealer?  I recently went to one and was told, "We don't dicker about price, the price is on the window." That's happened to me before at Chevy dealers.  Needless to say, no new Chevy has ever graced my driveway.  I simply don't care what price they stick on the window, I've never paid the MSRP for a car.  I guess a lot of lemmings do, tho.  

 

People actually dicker at grocery stores?  How dey do dat?

 

Rich

 

I can't say I've had that experience. Now back in the Saturn days, that was defintely a thing, no haggling. I greatly dislike the dance you go through, it does tick them off when I tell them that I don't want to talk about the monthly payment etc and just the total price.

 

I have no idea, or even if they are telling the truth. But it's been claimed by people that say they keep calling to get cheaper rates on DirecTV that if they don't like the price of ground beef, they try to negotiate. They're lucky most grocers don't have an actual butcher on staff :)


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#24 OFFLINE   jimmie57

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Posted 28 July 2014 - 10:35 AM

I have seen dealers that had Hand Written a price on the windshield and said that this is the best and final price. No haggle pricing.


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#25 OFFLINE   longrider

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Posted 28 July 2014 - 11:50 AM

While Saturn was the only brand that required a no-haggle sales practice It is becoming more common on an individual dealer level. It is still a small minority but it is growing.

 

Regarding the practice of bargaining on a payment rather than price, even a fair number of sales people don't like it but the simple fact is it works.  For the majority of buyers who are financing the payment is all that matters. Taking an example of 10 payments of $100 or 20 payments of $60, even if you explain that the latter will cost you $1200 instead of $1000 all that is seen is $60/month vs $100/month.  Sad but true


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