Borders' New 'Low Price Promise' Fades in the Fine Print

If you're still an employee at Borders (BGP), the second-largest bookstore chain in the country, the chances are pretty good that your stint hasn't been a happy one lately. Multiple rounds of layoffs, a revolving door of chief executives, new ideas that bear little resemblance to selling books (like stocking Build-a-Bear kits) and an e-reader department that doesn't include the top sellers in that sector, Amazon's (AMZN) Kindle and No. 1 book chain Barnes & Noble's (BKS) Nook. Even worse, B&N's new Nook Color and the rest of the Nook line will be the only e-readers stocked by the No. 3 bookstore chain, Books-A-Million (BAMM) -- which sends a symbolic message that Borders is the odd retailer out.

And based on what DailyFinance has learned, store-level employees are not exactly thrilled by what executives at the company's Ann Arbor, Mich., headquarters have cooked up just in time for the holidays: a new "customer satisfaction initiative" that promises to match the lowest price available elsewhere at a brick-and-mortar store. But busy customers should pay attention: The price matching offer carries a number of notable caveats.

Naturally, the statement about the program from Borders President Mike Edwards is puffed up with platitudes. "We're the first and only major bookseller to introduce a program like this that truly puts all consumers' needs first," he said. "In a competitive environment, the differentiators for consumers are value offerings combined with an exceptional in-store experience. Our customers have no reason to shop anywhere else."

More Exceptions Than Discounts

That sounds nice, until one discovers the limits on the offer, which poke large holes in Edwards' closing sentence. For one thing, the "Low Price Promise" price match only applies to "a local competitor's advertised, in-store price on items that are in-stock." So if a customer asks for a price-match on a deal that's available only on the Web -- say, at Amazon or Wal-Mart (WMT) online -- they won't get the price matched. Likewise, if the low price isn't offered in a printed ad, the match offer won't apply.

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Customers also won't get any existing discounts available at Borders stores or through their website on top of the price match. And if you're a customer hoping to use the price match program at a Borders Express, one of the temporary stores opening up only for the holidays, you're out of luck. For that matter, you're also out of luck if you want to price match on Thanksgiving weekend, so Black Friday shoppers won't benefit either.

It's perfectly reasonable for any discount to have exceptions. But if you've been to a Borders store lately, you've likely noticed that the few staffers who remain after those considerable layoffs are tied up with other activities, such as helping prospective customers learn how to operate e-readers. That eats up a lot of time, and explaining the ins-and-outs of the Low Price Promise will consume even more -- especially when it comes to explaining why price-matching doesn't apply to Internet offer, or why you can't use your discount card with the program. And the longer it takes to explain why they can't get the deal they thought they were getting, the more likely it is that the customer will take their business elsewhere.

The bottom line on the Low Price Promise is, unsurprising, the company's bottom line. Borders, after all, is mired in debt, with quarter after quarter of revenue declines -- and another is expected when third quarter revenue is reported on Nov. 22. That means that any idea that looks good on paper for company investors -- and especially chief investor Bennett LeBow, the company's chairman and CEO -- is likely to be seen as worth trying. Borders has thrown up yet another Hail Mary pass that's doomed to fail -- but this one will bring considerable headaches for those who still have jobs in its stores before the pass falls incomplete.