Hi, this is Wayne again with a topic “Newegg reacts to pricing error in the WORST way”.
Newegg reacts to a pricing error in the worst way is my headline here. This was prepared by riley murdoch as someone who has caused pricing errors in the past, i apologize in advance for the somewhat more um sympathetic, sympathetic, read that i might have on this. In fact, i’m gon na – let you do it – i haven’t actually read this yet. I have no idea what happened? It’S possible it’s just outrageous and inexcusable, but i made mistakes before and i was very grateful when people didn’t try to pin me to the wall for them uh on august, 7th, around 4 p.m.
Est there’s some typos here, but newegg canada listed a gigabyte rtx 3090ti model for 1084.99, an 855 discount off of its previous 1940 nice. This deal was posted on r, slash, bapc sales, canada and red flag deals. Dot com, red flag, deals, dot com. That brings me back red flag deals was the bane of my existence when i was working as a product manager and was one of my top three bookmarks before i was a product manager. I also remembered that um, where many for you talking about red pack deals literally all the time man red flag deals was my jam.
That was my haunt ncix forums and red flag deals actually might have been my top two bookmarks back when i was similar. I was just ocn and red flag deals: yeah um, i i was on red flag deals, just not as much as you were uh, where many users reported receiving order. Shipping confirmations for these graphics cards seems, like almost everyone had their orders cancelled, and it appears that newegg forced an rma, slash, return and told the shipping company to return packages to hq. Oh okay, i’m gon na have to look at that a little more closely.
It’S possible, that’s not quite how it went down, but i’ll explain that in a little bit many contacted support and we’re told conflicting information. It’S not a price error. Actually, it is a price error. The gpu was out of stock, even though it was in stock. After all, the package – everything – oh, even though it was back in stock after all, the packages had been returned. No, actually the free game bundle was out of stock yada yada, red flag deals, looks exactly like it did 10 years ago, except with more ads yeah.
Some customers were charged for the game, bundle price and given a 25 gift card for their trouble, uh newegg’s actions may violate canadian consumer rights law, which requires retailers to honor the lowest advertised price uh. In some cases, quebec, especially quebec, always has special asterisks on literally everything. Judges have sided with the retailer, in a case extremely uh, of extremely drastic price errors, uh, like a computer being listed for two dollars, which was like clearly an accident uh. But was it a pricing error earlier this week, officially or evga? Officially slashed 1k off of some of their rtx 3090 models? Crazy. So i have some speculation. Um so take this for what it is.
Speculation for the shipping confirmations that were supposedly recalled uh. What is possible there is that the label was created. A lot of people don’t know this, but when you get a shipping confirmation from a retailer, what that means is a tracking label has been created in the system. It does not mean that that consolidated pallet of boxes has actually left the warehouse, so it is quite possible that these were not actually shipped and therefore from newegg’s point of view not shipped now that that doesn’t necessarily make me lean one way or the other in Terms of you know, were their actions right or not right. It’S just something that a lot of people misunderstand. They think that a shipping confirmation means the parcel is in the air, and it doesn’t actually mean that um another thing, oh shoot. What was i gon na talk about? Oh crap, there was another man. There was another really interesting, oh yeah, right, so the bit with customer support having different stories that is pretty normal and a company that size they would have probably multiple teams of customer support, and it is quite possible that some people thought one thing and others didn’t Get the memo – that’s just that’s just pretty.
Obviously, human error. There are ways to fix that new egg. By the way, if you have a managed team-based can response system uh, and you see a problem coming like this and someone orchestrates a can response. Then the entire team gets the update, it should all be unified, but one person might have sent out a different one before that happened.
Yep so stuff definitely possible. I’M just saying yeah. Now, here’s where i get into super speculation, territory, evga officially slashed the price by a thousand dollars right, newegg discounted this gpu, this gigabyte gpu by 855 dollars – something i know about evga from dealing with them – is that, aside from their policies by and large, within the Constraints of the industry they operate in because they don’t have a ton of margin. By and large they try to do the right, damn thing as a company, and that goes for end users.
That also goes for partners. So, while it is possible that if it was an evga gpu, they might have been able to okay so hold up. First of all, it’s very likely that if evga is slashing the price, but not very likely, it is a guarantee if evj is slashing the price by a thousand dollars, nvidia adjusted the price period. That’S how that works.
Evga doesn’t have a thousand dollars of margin in an rti in anything they just don’t have it so nvidia altered the price, but remember guys: nvidia has their own inventory of chips, and sometimes it’s virtual inventory. It’S allocations of future productions. In the case of the 30, 90 ti suspect, it’s actual inventory, not allocations, because it seems to be overstocked, but nvidia has their own inventory then, once it reaches the board partner, there are different layers of inventory. They have inventory that is on allocation or is raw chips.
They have inventory that is completed boards. They have inventory that is binned to a specific sku. So, whether it’s a super clock or a super super clock or a super ultra clock or whatever else, then they have inventory that is in their retail partners. So the way to deal with all those different layers of inventory comes down to whatever the agreement was whatever the purchase agreement was for those gpus.
So an example of how it might normally work would be that nvidia drops the price. An evga goes: um, hey, we’ve like got tens of thousands of these things sitting in our warehouse and in our uh sitting, unbuilt and sitting built in our warehouse. What on earth are we supposed to do with these and nvidia would in those cases typically, if they’re not if there isn’t a special arrangement, they would offer what’s called price protection or some kind of mdf or kickback, or some way to take that new inventory and Bring it down to the new cost, there’s lots of creative ways that you can play around with to do this sometimes they’ll they might and i’m not saying nvidia. Does it this way, but i’ve seen lots of different strategies. Sometimes they will simply offer you um a credit on your next order. Sometime very rarely, they would issue a cash uh, a cash back to you uh. Sometimes, if it’s a smaller amount – and it’s not like critical to doing maintaining your business, they might offer you like an mdf like a marketing discretionary funding, where you just have to send out some email blasts that promote whatever this brand is and then they’ll send you Cash for that, however, they can justify it on their books. Another way they might do.
It is a blended cost, so they might sell you this new, lower cost inventory at an even lower rate, so that you’ll load up on more and push this new aggressively priced product and that will help bring down the cost of your existing inventory. There’S lots and lots of different strategies that you can use around this, and so what i suspect is happening right now is some gpus are being covered in such a way, and some of them are hanging in limbo and it depends on whatever the agreement was. If i’m nvidia and i’m clearing all of my old 7 900 gtx gpus to evga – and i think it was one other partner to rebadge as the gto that was just like this weird one-off card and i’m using this example, because it’s a very real-world example. It was so cheap.
It was like 299 for what was essentially a gtx, which was a 600 500 600 canadian card at the time. What i suspect is that that’s a final sale, no refunds, no exchanges! You want these old chips right when the new generation’s coming in you deal with them, but on a current gen product in order to support their partner. Nvidia doesn’t want their board partners going out of business right. It’S not that’s, not good, they want them. They want them scraping by yeah yeah yeah, but they don’t want them going out of business right.
I don’t want the other teams to lose, but they want to win by as much as possible, so they they. So they would have some kind of price protection agreement in place on evga’s existing inventory, but where it gets a little bit more gray is what about evga’s inventory that belongs to a retailer. What about a retailer stock so that comes down to that board partners? Specific agreement, not just with that retailer, but maybe even for that specific shipment – maybe these are ancient ancient cards.
These gigabyte cards at newegg that were bought back at the peak of the gpu crisis, um that were sold, as is no you guys. You guys got your allocation, these things move on their own, we don’t want any part of it, and that was part of the condition for a price or an allocation or a promotion or whatever the case may be right. It’S possible that that’s where the wires got crossed, and i realize it sounds very convoluted to you guys, but these are very real things that really happen.
So maybe evga went to newegg and was like hey we’re price, protecting everything. Let’S get the new prices in place. Don’T worry, we got you, maybe gigabyte didn’t.
Maybe there was a different arrangement there. Maybe someone went and started making price adjustments to ensure that all of their all of their 39e ti’s were in line with the rest of the industry. Thinking, oh well! It should be fine because we’re going to get we’re going to get mdf or we’re going to get price protection back on all of this stuff, so we’ll deal with it later, but maybe they didn’t realize that the pm had struck a special deal on these particular Cards and there wasn’t gon na – be any price protection um.
So was it a pricing error almost certainly, but was it a pricing error where they just like fat fingered the keyboard, i suspect, that’s very unlikely, looking at the size of the discount and the other moves that are being made by other players in the same space. That’S my that’s my takeaway, as for them lying about stock and leaving customers with 25 gift cards at the end of the day, i think it’s going to come down to a court. If people ultimately do decide to pursue legal action, i think it’s going to come down to a court to decide if this constitutes a reasonable expectation that the price was accurate in canada.
That’S the bar the main thing that bugs me is like forcing a return and giving them all their money back is like very annoying yeah, but they didn’t like scam you. They wasted your time yeah, which has a value. They definitely wasted your time, the one that bugs me is some cut this this line right here, some customers were charged. The game bundle price, which is, i think, means the non-discounted price um and we’re given a 25 gift card for their trouble and then there’s just like a little smiley face.
If that’s the full price, and then they gave them a 25 gift card for their trouble. That’S some like major bs. I want to like look into this a little bit more, so we’ll see what happens um. I i there’s the inside baseball of what might have gone down um.
I hope that it was an innocent mistake. I i hope that nobody actually ended up out any money over this, and i i sympathize with anyone’s disappointment and not getting the deal uh bad situation, so they weren’t charged the full price of the pre-discount. They were charged a hundred and sixty dollars for the game.
Bundle um and then given a 25 gift card uh and there’s a response to it that says uh that it it has a credit card, chargeback written all over it and it sure does um yeah. I don’t know not great, not great. .