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Suppliers to Wal-Mart Stores are receiving notice from the retail giant of a cost shift requiring product suppliers to provide price protection for items such as electronics, apparel and toys that are bought and placed in holiday layaway.

Talk Business & Politics obtained a copy of this notice sent from Walmart Global Business Services to certain suppliers.

The retailer is asking suppliers to cover the cost on all inventory when there is a price drop such as year-end closeouts or holiday promotions. For example, if a customer buys a television for $800 and puts that item in layaway ahead of Christmas, but the manufacturer lowers the cost to $725 to help clear inventory by year-end, Wal-Mart will expect the supplier to cover the $75 price differential per item in the retailer’s inventory, which includes layaway.

Wal-Mart said it doesn’t record the layaway sale until the item is picked up, so it’s still considered inventory. The retail giant said it previously didn’t have visibility to items once they are put in layaway because layaway merchandise is pulled from store inventory and placed in “layaway liability.” Wal-Mart said inventory in layaway liability mode at the time of a price cost decrease is picked up by customers at the new lower cost. In other words, the retailer said it’s passing the lower cost on the customer at the expense of the supplier.

Boyd Evert, president of Harvest Revenue Group, said his firm is working multiple six-figure chargeback claims from last holiday season from suppliers related to price drops during the holiday season, which also happens to be year-end. One frustration Evert said suppliers have with this policy is a lack of transparency and visibility to know if the customer really pays the lower price. He said suppliers want to know if customers are getting the lower price and there now is no evidence of that from Wal-Mart.

Evert said the claims coming from this policy are increasing because suppliers are not protecting themselves in their contract negotiations with Wal-Mart. His advice for suppliers is to specifically spell out in the contract the manufacturer will not provide price protection for items sold into layaway.

“Suppliers who made that stipulation last year avoided claims and those who got claims had them canceled within hours of receipt. It’s an incredibly cumbersome process for suppliers to try and follow the money. They can back into the math and get pretty close by using Retail Link and replenishment data and taking out the inventory numbers in stores from the items shipped per store to try and estimate how many units are in sold into layaway. It’s a store-by-store accounting which is tedious for suppliers in 4,000 stores,” Evert said.

He said suppliers at the most risk for chargebacks are those who sell toys, electronics, apparel and other seasonal merchandise frequently placed into layaway. Those are also often the items that receive holiday promotions that lower prices between early September and mid-December, the timeframe of Wal-Mart’s layaway program.

Deloitte reported just 14% of consumers used layaway for the holidays last year. The same report found despite some early pre-Thanksgiving promotions and layaway to help them stretch out the payments of large ticket items, 40% of consumers waited until December to start their shopping. Just 5% began shopping in October and 9% did majority of holiday shopping on Black Friday, while 6% made major purchases on Cyber Monday.

Evert said clients he represents against retail chargebacks have seen six- and seven-figure claims related to holiday price drops and it’s likely to happen again unless suppliers take a proactive approach in contract negotiations to exempt layaway price protections.
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Damned Walmart anyway.

Someone said the 3-9 vx 2 was marked down some more. I drove forty miles each way this evening to check where I had bought one last week.

Yep, they still have one in the display case. Wandered around until I found a clerk stocking shelves. "I will take that one."

He can not find any in the stock drawers. "That is all right, I will take the display."

He can not find the box. " I do not care, I will take that one."

He called the manager. We can not sell the display model. WTF, they are discontinued. You will not be getting any more of them in?

I am going to call over tomorrow and get the day shift manager and see if I can get it locked up.

I'm beginning to wonder now if Walmart even allows layaway of closeout items. Kind of makes sense that they wouldn't on certain items and especially anything close out priced because it's not going to be stocked anymore or replaced by new or different models instead.

I'm beginning to wonder now if Walmart even allows layaway of closeout items. Kind of makes sense that they wouldn't on certain items and especially anything close out priced because it's not going to be stocked anymore or replaced by new or different models instead.

Right

But your little nephew leeroy could if you told him about a fantastic sale going down on a specific item



Btw, they were going to give me the business the other day on a rifle that "darrell wouldnt be in till 1pm and it takes two to make a firearms sale and do a 4473"

I said no problem slap on lay-a-way, I'll be back in 4 hours

But, miraculously....darrell or wtf ever his name was there all along, he was feeding the fuggin goldfish in Pets Dept "cause that's his thing"



And the lay-a-way deal....i've skirted that before in times past, they will lay away anything even a firearm 365 days a year IF you simply conduct the transaction at the jewelry counter. I've done it. ( may be different now) but have done before about 3-4 yrs ago


Just my experiences

The answer from dayshift management: no notice for further markdowns from HQ and can not yet be put on layaway... Mini14 still $599.

Pisses me off when they have something rolled back at one location but not the other! Fuggers! LOL

I missed the Wby .243 I was hoping for this morning, but guess what? A Savage youth .243 at $199 is now on my layaway...I can add a slip-on Limbsaver to make it a fit for me, and who knows if my first grand daughter in 10 years or so will need one.

Haha,
Just think if these were chambered in 6.5 manbun, they'd all have been sold out the first day.

I'll take O'connor's darling anyday, regardless of how many hipsters heckled me for it.

I know. I found a store that had the Nikon scopes that slumlord and renegade had found for $99, but they are still marked regular price of $357. Plus......they deny that the other stores have marked them that low.