Price Matching: Thanks for the Memories

For decades, customers wanting to take advantage of a price-match program used to present a store clerk with a circular ad; today, they point to a webpage on their smartphone screen. What they say remains the same: “Hey, that the other store is selling it for $19. Can you match that?”

Such matching used to be virtually automatic for many major retailers. Now, in a moment of slim margins and shifting tariffs, some firms are pressing pause. One large retailer is ending its famous matching program; experts say other firms have started tightening or ending theirs. Of course, not all retailers are following suit, and there’s no guarantee the new changes will hold. But for now, there are clear signs, experts say, that an era cherished by bargain hunters may be nearing an end.

Experts say retailers are trying to increase certainty around profits while at the same time managing unpredictable markets, supply chains, and consumer budgets. “Firms have to be more nimble and thoughtful about preserving margins and overall pricing strategy,” says Peri Hansen, a Korn Ferry senior client partner leader of its Consumer Products and Marketing Officers practices in North America.

The on-again, off-again drama over tariffs may also make the logistics of price matching virtually impossible: Customers today can find a lower offer online within seconds. “There’s always a place that will sell it for less—but think about how much time it takes to prove that,” says retail expert Craig Rowley, a Korn Ferry senior client partner.

Price matching was never intended for the internet age. Historically, it’s been the strategy of, say, two local drugstores in a small town trying to undercut each other. Customers have understood price matching as a magnanimous gesture that allows them to remain loyal to a particular store. The policy has allowed retailers to keep most prices high, while still offering lower prices to consumers in the know: For example, one major retailer raised prices on its private label by 18% after instituting a price-match policy, according to a 2018 study out of the University of British Columbia.

Experts say price matching surged after 2010 as a way for brick-and-mortar stores to remain competitive with online retailers, particularly for products like televisions and computers. Then online retailers joined the game, using the policy to stay afloat when large competitors slashed prices below cost.

But the long-term results of this tactic are mixed. For a while, it seemed like every store offered price matching: During 2022, nearly half of the 100 major online retailers offered price-match guarantees, according to research by DigitalCommerce360. And consumers’ responses changed over time. “The generosity of price matching no longer breeds any sort of brand loyalty,” says David Vied, Korn Ferry’s global sector leader for medical devices and diagnostics. “It’s just part of the landscape, and it’s underappreciated.”

Price matching doesn’t necessarily attract the right customer, either. “At the end of the day, retailers want people who buy products at full price, and will buy even more during sales,” says Rowley. But price matchers may not meet a store’s customer-spending objectives. And the policy requires administrative overhead: Staffers must be trained to validate a competitor’s price—which can be very confusing if stores sell slightly different models of a product, for instance, or if the promotion applies only to national, not regional, retailers. These scenarios result in customers waiting around, and then being told no. “It’s not always great for customer relations,” says Rowley.

In practice, customers price match when they discover a product at one store is substantially more expensive than it is at another, often a big-ticket item like a plasma TV. Price matching is therefore a valuable program for specialty shops selling electronics or furniture. “It’s stores that don’t want to miss a sale,” says Rowley.

Moving forward, retailers are looking for more effective options in order to harness the mix of price, quality, innovation, and customer experience needed to breed devotion. “I’m hearing more conversations around how to drive loyalty,” says Renee Whalen, North America consumer market leader at Korn Ferry. “Retailers need to figure out how to meet customers on all fronts.” Winning on price, she says, is just one piece of the pie.

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