Walmart's Holiday Price-Match Offer Is Just a Gimmick

Attention, Kmart shoppers. Walmart (WMT) wants your business. For that matter, it also wants your business if you shop at Sears (SHLD), Best Buy (BBY), Costco (COST) -- anywhere, really.

The biggest retailer in the world is training its guns on all and sundry in a major marketing move that threatens to steal market share across the industry. Over the weekend, Walmart announced a revamp of its commitment to match prices on any rival retailer's advertisement, so long as evidence of a better price is presented at checkout.

From Nov. 1 all the way up to Christmas, Walmart promises to match prices retroactively.

Yes, you read that right. Buy a pair of jeans, a Barbie doll, or a flat-screen television at Walmart next week, and if at any time for the next two months anyone anywhere advertises an identical product for a better price, you can come back to Walmart and claim a refund for the difference.

Sort of.

Caveats with a Capital "C"

There are a few wrinkles to Walmart's generous offer. For one thing, the whole idea behind this marketing push is to starve rivals of your business and keep as much money as possible circulating in-house at the world's biggest box-store. How will it do that?

  • Don't expect Walmart to pay out your refund in cash. That currency is too darn negotiable to risk your walking out of the store with it and re-spending it elsewhere. Instead, Walmart will pay all refunds in the form of Walmart gift cards.

  • Also, while billed as a blanket insurance policy -- "go ahead and shop Walmart; you have nothing to lose, because we won't let anyone underprice us" -- this deal is actually more of a patchwork quilt. It doesn't apply to certain product classes, for example. No guns. No groceries. No ... gasoline. (Apparently Walmart shoppers are a pretty crafty lot. I'd never have thought of that angle myself.)

Of course, even if you stick to shopping the basics, there's no guarantee that Walmart will make good on (what you thought was) its promise.

Must be an exact match: As with similar price-match promises from rival retailers, Walmart's offer is good only if the lower price is for a completely identical item -- same brand, same size, same color, and same model number.)

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Amazonian deals don't count: To discourage non-traditional spending patterns -- like that newfangled online shipping at places like (AMZN), Wal-Mart is adding another restriction on its price-match policy: No Internet ads need apply. Rival retailers like Staples (SPLS) and Bed, Bath & Beyond (BBBY) are apparently scared enough of the online behemoth that they're promising to match even prices offered by Amazon. But not Walmart. If you want its guarantee, you must play by its rules.

Black Friday -- blacked out: Perhaps the most important caveat to Walmart's price-match policy, however, can be summed up in two words: "Black Friday." American retailers rack up as much as 40% of their annual sales during the Christmas season, and it all starts on this most important shopping day of the year -- the day when the biggest and best, most mind-blowingly cheap prices are advertised, when the ads contained in your Thanksgiving Day newspaper outweigh the actual newspaper itself by a factor of five or more.

Problem is, a lot of these ads are limited-time only -- i.e., Black Friday. And a lot of the stores that offer Black Friday deals limit the quantities of goods offered at fire-sale prices. (Because you can only afford to sell so many plasma TVs at $49.99 apiece, and still pay the electric bill.)

Were Walmart dumb enough to apply a blanket price-match guarantee to Black Friday deals ... you just know some smart rival really would sell its Samsungs and Sonys at $50 a pop, just for the pleasure of watching Walmart go broke trying to keep up. And investors would take a (Sam's) club to Walmart's stock price.

Long story short, yes, Walmart's ad campaign is a gimmick. No, it's not all it's cracked up to be. But then again, that's pretty much always the way these things work.

Motley Fool contributor Rich Smith owns no shares of any companies named above. The Motley Fool owns shares of Wal-Mart Stores, Best Buy, and Costco Wholesale. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores, Staples, Costco Wholesale, and Bed Bath & Beyond. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores.

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