Mr PoP and I are not big on “shopping”. (Please control your shock.) Yes, we purchase items when we need them, or more realistically when we want them, but the act of shopping for them is generally a fairly unpleasant process all around. To address that unpleasantness, we try and find our optimal point along what I like to think of as the Price-Headache curve* that applies to the purchase of most items.
From this graph, you can see that if the purchaser is willing to pay virtually any price for a good, that purchase can be made while incurring infinitesimally small headaches. Think an uber-wealthy person simply mentioning a desire to a personal assistant who then dispatches a team of personal shoppers in pursuit of satisfying the whim of the ultimate purchaser. Very few headaches, but the uber-wealthy individual is paying a high price for that luxury (though perhaps indirectly via the salaries of their assistants and personal shoppers).
In contrast, there is an asymptotic price that will be approached for each good where the purchaser cannot obtain it for any less, despite a willingness to bang one’s head against the wall. For this, I turn to memories of being dragged out to early morning Black Friday sales with my mother when I was a kid. It *was* truly possible to get a crock-pot for $4, but one had to brave both the weather and the crowds in order to get a shot at one of those loss-leading crock-pots.
More recently than my childhood trips on Black Friday, the internet has flattened the Price-Headache a bit, allowing purchasers to procure items with fewer headaches than ever before, but it has also seemed to shift the curve to the right. Or (as my mom would say), the deals just aren’t as good as they used to be*.
But even with the help of the internet, it still seems to come down to this: How many headaches is one willing to endure to secure a low price?
Not only does the answer to that question vary from person to person, but (as I have discovered) it’s also not a fixed value. I’ve seen myself move a bit further to the right on the Price-Headache curve (willing to endure fewer headaches) over the years as our financial position has strengthened. But in the end, a part of me is still my mother’s child, not really wanting to pay more than I absolutely have to, particularly when it comes to big ticket items! And I feel like this year I finally discovered a tool that helps me reconcile these two contradictory positions.
Enter Price Protection Through Our Credit Card
Other cards also seem to offer this benefit, but so far we’ve only used Price Protection through our Discover card, and their benefits seem to be pretty straightforward (and seemed the most generous of the ones we have when I started looking into which card to use to buy our appliances). Buy something using your Discover card, and if you see a lower advertised price within 90 days, you can call Discover and file a claim for them to refund the difference in price (up to $500 per purchase, up to $2,500 per year). They don’t refund shipping or tax, but that *seems* to work in our favor as you’ll see in the examples below, all of which come from my recent binge of appliance shopping for our new kitchen.
When I told one of my coworkers I was thinking of trying to use this benefit, she said that she had heard of it, but that she never used it since her husband just went back to the store if a new lower price was advertised and berated the customer service agents until they re-rang up the transaction and did a return on the one he had already purchased. “That way you get refunded the sales tax, too!” she helpfully pointed out. In my head all I could think as she was saying that was, “6% sales tax is NOT worth abusing another human being like that…”
How It Worked For Us
In October, we bought a wall-mount microwave from Home Depot online (the one in the later pictures here…). We picked it mostly based on the reliability ratings of the brand from Consumer Reports, the model’s features, and then I did a few quick searches to make sure we were getting a good price. At $298 + tax, but free delivery, we were. At that time. It was altogether a fairly low-headache purchase process. But as it turned out a month later, we hadn’t scored the best price available.
When Home Depot’s Black Friday sales started popping up on their website, the microwave we had paid $298 for a few weeks before was now listed at $218, $80 less.
So I snapped a couple of screen shots, and submitted a claim through Discover for the difference. Lo and behold, it was approved, and we received a check in the mail for $80, making our net price** $218!
When it came to the fridge and range/oven that we purchased, the process was pretty similar. We picked out the brands and the features that we wanted (thanks to all that advice from our awesome readers!), and then selected the models that seemed to give the best combination of those without paying through the nose during the Black Friday sales.
Thanks to the internet, all of my research was done with minimal headaches from the comfort of our home, as was the actual purchase, which I made using the Discover Rewards portal, scoring an additional 10% cash back on the purchase for using their referral link to (again) HomeDepot.com.
The fridge was priced at $1,148, but because I was also buying the stove at the same time, I got a Buy 2, Appliances get $300 off deal, making the “actual” price of the fridge $998 + tax. Again, delivery was included free of charge. Sweet!
Then about six weeks later, I found our fridge on an “unadvertised special” price of $800 at a store that doesn’t have any locations near us. Since the price was unadvertised, as in one of those, price only appears after you put the item in your online shopping cart, I wasn’t sure it would work, but for $200 it was worth a shot! I submitted pictures of the page showing “Price shown in cart” and then a picture of the price in the cart, and just found out that my claim has been approved! We’ve got another check for $200 headed our way soon, making our net price (pre-tax, but also pre cash-back rewards) on the fridge $800.
The Thing Is, We Never Could Have Actually Gotten These Prices
In both instances where I submitted a claim for the new lower price, the low price had a catch. That is, the free shipping was not offered***.
For the microwave, the Black Friday sale price was actually $218, with a $59 delivery charge (though by the time we ordered the fridge and stove I’m pretty sure the microwave would have shipped for free on an order that big). And for the fridge it was even more drastic. Since there aren’t any locations of the store that showed the lower price in our area, we would have needed to pay $149 in shipping charges. Ooof! If shipping was included in the refunds, instead of $80 and $200, our refunds would have been $21 and $51. Still nice to have, but worth the effort? Ehh… maybe…
So this Price Protection benefit actually ended up netting us lower prices (due to the shipping differential) than if we had just waited and tried to time it with the absolute lowest sale price.
It Hasn’t Really Been *Too* Many Headaches…
Finding the lower prices wasn’t too hard. With the microwave, I came across it when I was searching for the fridge and stove a few weeks later. For the fridge and the stove, I have a little post it on my monitor at work that I wrote their model numbers and purchase prices on. Once a week or so, I type them into google and click on “shopping” to see if there are any deals. I could have waited longer and searched harder to find even cheaper prices to submit for our claims since I submitted both of them after about six weeks instead of waiting the full 90 days. But the marginal benefit of doing so seemed likely to be pretty low, so keeping the Price-Headache curve in mind, I quit when I had satisficed my need for a good price.
I’ve still got a month or so left to find a better price than what we paid for our stove , but so far it’s not looking good. Same goes for the Scooba I bought the same weekend. But is knowing we got great prices on those items really the worst thing in the world?
We Definitely Wouldn’t Do This For Everything
Despite the fact I genuinely think this is a pretty awesome card benefit AND that the minimum refund for processing a claim is $1, I’ll probably still only use this for big ticket items. And when purchasing said big-ticket items, I’ll try and remember to opt for purchases where there aren’t add-on fees that wouldn’t be eligible for reimbursement like shipping. But in the end, the amount saved needs to be worth the time and mental effort, and for where I am on the Price-Headache curve these days, that’s a moderate bar to hurdle.
Have you ever used the Price Protection benefit on a credit card? What do you do if you find a lower sale price after you’ve already bought something?
* There does seem to be some evidence that my mom is at least partially correct on this point in that more and more companies seem to be under scrutiny for inflating prices prior to markdowns in an attempt to make markdowns seem more drastic than they truly are while keeping the actual price items sell for relatively constant.
** That Discover doesn’t reimburse sales tax means it’s technically a tad (6%) higher than this, but we also got cash back rewards (5%) on the full amount originally charged, so they largely cancelled each other out. In the case of the fridge, the 10% cash back more than offset the 6% tax on the difference paid.
*** Just like most of those 3rd party sellers on Amazon, by the time you add their shipping charges in, the prices are basically the same as Amazon’s using Prime shipping! Everybody’s got to keep their margins!