After having three kids, I always know if I need to find something specific for my kids, Toys ‘R’ Us or Babies ‘R’ Us will have it. They have everything, but you pay for it. They have all the coolest kid-related gadgets and the higher-end car seats, strollers and really anything else you can think of. It doesn’t surprise me to hear that the Federal Trade Commission (FTC) is investigating them for price-fixing.
So what is price-fixing? In a nutshell, price-fixing means they carry products and make a deal with the manufacturer that they must enforce retail-price maintenance. This means that each product must be sold for a certain amount, not allowing Web sites to offer at a discount. Stores which are online do not have the overhead that brick and mortar stores do, which gives them the ability to sell items at a discounted rate, in most cases.
What products does this include? You know those really fancy, high-priced strollers? Yep, the ones that are on every “must-have” list. Notice that you can’t find them anywhere else at a good price? They are all about the same price because the manufacturer has made a deal to ensure they all stay that way. Know those fancy breast pumps that you can ONLY find at Babies “R” Us? Everyone will tell you the Medela is the best out there and not to waste money buying the other brands, but $300 is a steep price to pay. If you want a Medela you will have to pay it though, because that is what the manufacturer says it has to be.
This isn’t the first time Toys ‘R’ Us has been in this trouble. In 1998, they were found guilty of strong-arming toy manufacturers. Toys ‘R’ Us told the manufacturers that they would not carry any toys that were also carried by Costco and other warehouse clubs. An order was put into place and Toys ‘R’ Us agreed to stop the act. But they are at it again, but this time under the Babies ‘R’ Us name.
The FTC is currently reviewing emails back and forth between Babies ‘R’ Us and manufacturers. Hopefully they can figure out how to stop this and get some prices to go down. Babies are expensive enough as it is, we don’t need price-fixing on the quality products we all want.
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