Lowe’s Business Model

tiboy

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I went to Lowe’s the other day to pick up some items for a home remodel. I have a Lowe’s credit card. I presented them with documentation for a price match since Home Depot had the same item for $4 cheaper. Rather than put the $4 on my card or give me a $4 gift card on the spot, Lowe’s decided to send me a $4 gift card via UPS. I cannot help but wonder if UPS charged more than $4 to deliver the card. Call me crazy, but that approach does not strike me as business savvy.
 

CandidPicker

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It may be that is standard practice for whatever amount of cash is required to be placed on a card. Typically, stores will not credit your credit card, but will offer a gift card of some form. Had the amount of cash been $25, $50, or greater, would you still be asking the same question? Regardless of the amount, Lowe's likely does the same for all of its customers, no matter what the amount, impartially.
 
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BMiller

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This actually makes sense. They are going to write off that 4 dollar "loss". They also get to write off the cost to produce the card and mail it to you. At the same time, they maintain a customer and a sale.
 

CandidPicker

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This actually makes sense. They are going to write off that 4 dollar "loss". They also get to write off the cost to produce the card and mail it to you. At the same time, they maintain a customer and a sale.

That's the kind of thinking managers like to teach to their employees. You wouldn't happen to be a manager of some type, perhaps? If so, am agreeing with you..
 

tiboy

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I’m missing something. I have no problem with getting a gift card. But if they gave it to me on the spot they save the shipping, keep the customer happy and get the $4 back as the card can only be used at Lowe’s. Similarly, it’s a Lowe’s credit card that can only be used at Lowe’s. Same result: happy customer and they get the money back. I understand not putting money on Visa.
 

veinbuster

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I’m missing something. I have no problem with getting a gift card. But if they gave it to me on the spot they save the shipping, keep the customer happy and get the $4 back as the card can only be used at Lowe’s. Similarly, it’s a Lowe’s credit card that can only be used at Lowe’s. Same result: happy customer and they get the money back. I understand not putting money on Visa.
It does seem silly.
I’m sure it is just there process and makes sense for larger amounts. They just didn’t bother to set a threshold for small amounts that should follow a different path.
I can see some merit in always doing things the same way. Less training. Fewer instances of doing it the wrong way.
 

pgj

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Guarantees you will spend that money at their store. They get their money back.
 

vchizzle

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To me, if you’re going to say you “price match”, you better do it on the spot or I’m buying it at the cheaper store. That’s a pet peeve of mine. We have a chain store based here that advertises a certain % rebate on all items regularly. The “rebate” is just a coupon back to be used in store. Nice, I you shop there a bunch but kind of a loose use of the term rebate.
 

vchizzle

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Guarantees you will spend that money at their store. They get their money back.
Exactly. Nothing wrong with that. It’s probably bending the definitions of the words used, which is what bugs me.
 

BMiller

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That's the kind of thinking managers like to teach to their employees. You wouldn't happen to be a manager of some type, perhaps? If so, am agreeing with you..

Not quite. By day my job title is Electrical Engineer. However, my formal college education is in Business Administration....majored in Marketing with a minor in Accounting. I have had to create P&L sheets many times for projects at work and I've worked with different departments (such as accounting) on numbers. I run a lot of CBAs as well.

Between my formal and informal educations, I have a different outlook on how situations like this work. I've won arguments with the corporate bean counters on things (lost some as well of course).
 

tiboy

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So they spend $2 in shipping with the hope that I won’t spend the $4 gift card? If they gave me the card at the store and I used it immediately they are likely making $2 on a $4 sale. If it cost them $2 to ship and I never use it, they are out $2 for shipping and out $2 profit. If I use the card, their $2 profit is offset by shipping costs.
 

jxe

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So they spend $2 in shipping with the hope that I won’t spend the $4 gift card? If they gave me the card at the store and I used it immediately they are likely making $2 on a $4 sale. If it cost them $2 to ship and I never use it, they are out $2 for shipping and out $2 profit. If I use the card, their $2 profit is offset by shipping costs.

sure, but at $6 things change.
 

pgj

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It would be interesting to know how many of those mailed gift cards never get used. If they credit your card it’s 100%.

Think Billions of dollars! So many gift cards go unused or only partially used. Read a report on it a couple years ago and it was kind of shocking. When they expire, that is profit for the company. Probably cost a big company less than 25 cents to print a gift card and mail it.

https://www.cnbc.com/2020/01/10/3-b...used-each-year-dont-let-them-go-to-waste.html
 
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