John Lewis cannot be trusted!

by Donna Ferguson on 07 February 2011  |  28 comments
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I used to trust John Lewis. Now I've changed my mind.

‘Never knowingly undersold’ has been John Lewis’ motto since 1925.

This means that, unlike other retailers who sneakily offer price promises on stock that isn't ever sold in any other store, John Lewis genuinely matches the price of an item if you found it elsewhere.

Or so all of us here at lovemoney.com thought until this weekend, when a reader of the Guardian showed that a new, sneaky little loophole in John Lewis’ terms and conditions  (introduced last September) means the retailer’s 86-year-old promise is no longer worth the paper it’s written on.

What happened?

The reader had bought a washing machine from John Lewis with a two-year warranty. A few days later, he saw the same model in Argos for £60 less.

The only difference was that, like the vast majority of retailers, Argos only offers a one-year warranty.

For this reason, John Lewis refused to match the reader’s price, citing its new terms and conditions. These state that stores will no longer match a price unless its rival offers the exact same warranty.

For me, this is like ripping up the promise and throwing it away. According to the Guardian, John Lewis offers two-year warranties on almost all its electrical items, while very few other retailers do so. This makes it almost impossible to claim on ‘never knowingly undersold’ promise for an electrical item.

The worst thing is, the reader could have bought an extra year’s warranty for around £27 from a third party company – still leaving him £33 better off if he hadn’t shopped at John Lewis.

He explained this to John Lewis. And even though he would then have had an identical item with an identical warranty, John Lewis still refused to honour its ‘never knowingly undersold’ promise.

Bizarrely, if Argos had offered the extra year’s warranty instead of the third party company, John Lewis would have agreed to refund the difference.

Let’s be fair

I know many lovemoney.com readers are big fans of John Lewis and will think its approach is fair. After all, the extra warranty is worth something, so why shouldn’t John Lewis expect you to pay more for it?

The question is whether  John Lewis is, indeed, knowingly underselling its products by charging more for the extra year’s warranty than you could buy it elsewhere. Personally I think it is.

Why has John Lewis decided to turn its back on a promise that has stood it in such good stead for decades? The answer is simple. It could not afford to compete on price with online electrical retailers.

Competition from cheap online retailers

John Lewis brought in the change regarding warranties at the same time the price-match promise was extended to items that can be bought on the internet.

This was a good move, and long overdue. It used to be the case that John Lewis would only match prices with shops, not with websites.

This meant the overall value and attraction of its promise was gradually being eroded, as the cheapest prices for pretty much everything are usually only available on the internet.

But guess what? The old version of the promise worked better for electrical items. If you could find a cheap internet site with one tiny shop somewhere in the UK, that was enough to force John Lewis to keep its promise.

For example, I know my brother-in-law (who is one of the savviest people I’ve ever met) would go hunting on the internet for a shop offering the same priced item, then go to John Lewis with proof.

Why did he go to all the hassle of that and buy it from John Lewis, rather than just ordering it online from the cheap internet retailer? Because John Lewis offered a longer warranty.

When warranties don’t apply...

Of course, warranties usually only matter – and apply - to electrical items. For all other items, the promise has been enhanced, as the fact that it now applies to items bought on the internet is a great step forward for consumers.

The advent of smartphone apps like Red Laser makes it even easier to reap the benefits of the ‘Never knowingly undersold’ promise on these items.

 Find anything you want to buy in John Lewis, scan in the barcode using your smartphone and the app will search every site on the internet to see if there is a cheaper price. If there is, show a shop assistant the proof on your phone and hey presto! you can buy it right there and then at the cheaper price.

We tried it ourselves, and it worked.

What do you think?

Although I can understand the reasons John Lewis has changed its terms and conditions, I feel sad that one of the few retailers I genuinely trusted has created this sneaky get-out-clause because it can’t compete in a straightforward way. In my opinion, a price match promise that was once straightforward can no longer be relied upon.

I'd like to publicly call on John Lewis to offer to match the price of the item, plus a third-party extended warranty, so it is a like-for-like sale.

What do you think? Please share your thoughts using the comments box below!

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