This week if you download a coupon you can get 30% off a full-priced book at Borders. They regularly offer similar kinds of specials.
So far as I know, this is a novel strategy for booksellers in Australia: not discounts on a particular book, and not discounts across-the-board, but one discount on a book the customer chooses (is there a unique barcode for each coupon which protects against fraud?). If the strategy is to get people into the store it is a clever one. It allows all books to attract customers rather than just the specials, but unlike across-the-board discounting it increases the yield on additional purchases.
What Borders don’t tell you is that sometimes you need a coupon for shopping at Borders to make sense. My weekly notice from Borders, which I received yesterday, advertises Colm Toibin’s new novel Brooklyn for $36.50. A Toibin novel is likely to be worth $36.50, but there is no need to pay this much. Other bookstores are selling it for the publisher-recommended price of $32.99.
Manufacturer-recommended prices are fairly unusual in general, but standard practice in the book industry. It seems to be a legacy of 19th century book price wars, which led to legally-enforced price setting. This is now illegal, but advisory prices survive. Presumably most booksellers still like them, because customers feel like they are getting a discount if the price is below what the publisher recommended, without people buying non-discounted books feeling like they are being ripped-off by the bookseller.
Generating that concern about being ripped off is the danger Borders faces in charging more than the publisher’s recommended price. Though prices varying between stores is a normal aspect of retailing, as Sarah Maxwell argues in her book The Price Is Wrong: Understanding what makes a price seem fair and the true cost of unfair pricing, the history of pricing in an industry tends to establish norms of what is a ‘fair’ price. If Borders acquires a reputation for ‘unfair’ pricing or being expensive, it risks losing customers. Since I first read about this Borders practice a few months ago I have been wary of buying from Borders without first checking prices elsewhere.
Perhaps Borders thinks the risk is worthwhile. They probably know the book market well enough to judge that publishers price some books below what the market is willing to pay (I paid $32.99 for Brooklyn, but I would not have hesitated to pay $36.50 if that had been the going rate). The question is whether profits from ‘over-charging’ will exceed profits from lost sales.