An online furore has erupted over an Aussie store that’s charging a $5 fee for “just looking” if you don’t buy anything, on the grounds that customers are just using it for advice. Is that fair and reasonable?
Celiac Supplies in Coorparoo has put up a sign indicating to customers that it’s charging a $5 fee for “just looking” customers, deductable when goods are purchased. The reasoning behind it is that the store owner claims a high volume of customers using the store as a reference and then purchasing elsewhere — presumably also online. The store owner, identified as Georgina, told AAP that “I’ve had a gut full of working and not getting paid. I’m not here to dispense a charity service for Coles and Woolworths to make more money.”
I have seen the suggestion that the whole thing is a publicity stunt, given the February timeline of the published sign. That’s always feasible as well, but it raises an interesting issue around stores with cover charges in the age of online retail.
Is it legal?
I’m not a lawyer, but I can’t see any reasonable reason why it wouldn’t be, as long as it’s clearly signposted. Australian businesses can conduct themselves as they see fit as long as terms and conditions are clear to customers. It’s not explicitly clear how large the sign actually is, or indeed how the charge is levied if a customer simply starts walking away, but presuming it’s as blatantly displayed as the media reports suggest, this should be on the right side of the law.
Should it be done?
Now, there’s a question worth more than $5. I can very much see where the store owner is coming from, as there’s a definite trend towards checking physical products in one store, and then buying based on best price. In the case of the kinds of gadgets that Giz readers love, that’s increasingly online. While that may work for online retailers, it’s a death spiral for physical retailers, who in essence are used as a reference library to get the kind of physical experiences that online shopping can’t provide. It appears in this specific case that the store owner is more concerned about physical retail, citing Woolworths and Coles as competitors, but in the broader marketplace it’s a definite phenomenon. A few years back, eBay even advertised around the idea of checking out products instore and then buying online.
There’s no doubt that the costs involved in a physical retail presence aren’t trivial. Admittedly, there are costs with an online business as well, but taking out rent, power, staff costs and spoilage can make for some attractive online margins. There’s certainly nothing that should compel us as consumers to only shop in stores, given we’re perfectly free to vote with our wallets.
Now, as to whether it’s a good idea to charge a looking fee, that’s another story again. There’s the obvious case that in a competitive market, doing anything likely to turn customers away may not be in your best business interests. I’d certainly be wary of an upfront “looking” fee unless I felt that I was going to get my fee’s worth of value in actual advice every single time.
In the tech space, that’s a hard sell, given that, for example, it’s almost the exact opposite of what Apple does with its stores. Apple isn’t fussed about a cover charge, or indeed if you go elsewhere to get Apple products, because it’ll see profit either way, even though the direct profit from the stores is likely to be higher than from resellers. Then again, Apple has a rather specific kind of monopoly on its own branded systems; when you’re talking something slightly more generic such as health foods I can see more scope for this kind of showroom checking but not buying.
What do you reckon? Do you check in physical stores and then buy online? What should bricks and mortar retail be doing to keep customers in store and buying from them?
Image: Auburn Alumni Association