Is Price Matching the Right Strategy for Your Retail Business?

Here is a question for all retail businesses. Aside from the product quality and services you offer, what drives shoppers to your online or brick-and-mortar store? The prices you offer. Offering competitive pricing, seasonal offers, and regular deals is one of the easiest ways of attracting customers. Additionally, your customers become even more loyal when you allow them to compare and match prices with other known retailers.

All retailers are constantly finding ways for improving their pricing strategy to win the audience. In such a competitive retail environment, offering a price match policy may seem like a wise option? But is it? The thing is, you need to understand the pros, cons, and some necessary aspects of price matching first.

Price Matching and Its Types:

Price Matching and Its Types

Providing a price match policy means allowing your customers to compare the price of identical items from other competitors' in-store or online prices and reducing your price on customer request. Target Price Match policy will help you know each and everything about the price match policy offered by Target store. Price matching has become an inherent part of e-commerce businesses. Usually, it requires customers to bring proof of lower pricing from competitors - like their advertisement or current online listing on their website.

The whole purpose of offering price matches is to win customers' loyalty and make your brand name mainstream among the competition. Bear in mind that there are various strategies available for this policy. Some are just happy with matching the lower price, while others go beyond and beat it. Here are some aspects you need to know.

Basic Price Match

Basic price match simply means setting the same price as another competitor on a customer’s request. However, you should only implement this when competitors are offering lower prices on the same products or services.

Price Beat

This is one step further than the basic price match. Price beat is an amazing way to win the sale of a product. You are offering products cheaper than your competitors. You may use this strategy on items that have large quantities or ones that are not in much demand. Set a specific amount or percentage margin the price beat.

Price Match After Purchase

Price match at the time of purchase is an ideal strategy. But you can also offer a specific time period say - 10 days to match other retailers’ prices after your customer has purchased from your store or website. In simple words, if the customer has the receipt, you’ll have to give a refund of the difference between the amount you charged initially and other retailers offering.

Price protection (Price Adjustment)

Price protection (Price Adjustment)
Price adjustment is nothing but price matching with yourself after you’ve sold the product. For instance, it is not a good look when you reduce your prices right after a customer has purchased from you. Price protection will solve this exact problem. Set a specific period for price adjustment and customers will never hesitate to purchase from you.

To know if price matching would be the right strategy for your retail business, we’ll have to understand its pros and cons.

Pros of Price Matching

Price matching is supported by some of the biggest names in the retail business. Walmart and Target also offer their customers to compare the lower prices of other retailers. There are others too like - Best Buy & Newegg. These retailers have implemented price matching because of the following reasons.

Improved Chances of Success

Your sales will improve when you start price matching. The results are pretty evident after a short time. Sometimes new business owners who are not offering price matches fail to understand the market trend and their position in the industry. So, when you start price matching, it’ll be easy to keep track of competitors pricing and their business strategy. Thus, you’ll increase the chances of your success in the long run.

Increased Consumer Confidence

Increased Consumer Confidence
A low price guarantee isn’t just beneficial to your customers, it’ll also put customers' trust and faith in your brand. With the increase in online retailers, customers have lots of options to choose from and make the best decision based on prices at different places. By offering a price match, customers will know that you have the best interest to win the sale in their favour. So, offering price matches is very important if it's profitable for your business niche.

Improved Sales

Operating a successful retail business is all about selling products at competitive prices. Competitive pricing means lower or similar prices than other retailers. Price matching is one of the best methods to reach this goal. 

To reach greater success in your retail business, you must see price matching from the customer’s perspective. Think about it, even if your favourite and trusted store are Amazon, if you see a lower price on another online retailer, you’d surely pay less for the product. If you deny price matching, even the most loyal customers will not hesitate from buying somewhere else. If you offer price matching, it’s a win-win for future sales also.

Cons of Price Matching

Price matching may sound all positive and beneficiary for your business, but there are many downsides too. Amazon doesn’t offer price matching but it's still the biggest e-commerce giant. All goes to its frequently changing prices to stay competitive. Here are some cons that come with price matching.

Profit Margin Degradation

Sometimes, price matching can cause financial instability in your business. Customers will surely get the product cheaper at your store, but if you constantly compare lowes prices of giants like Amazon, it'll not only reduce your profit margin but would also cause financial problems.  This becomes even more difficult when a product in trend has less inventory in your retail store. So, price matching is not always beneficial for profitability and have financial stability.

Risk of Price Wars 

Risk of Price Wars
Price matching comes with one of the major difficulties to overcome which is “price wars”. When top retailers like Walmart and Amazon are competing with each other, it doesn’t only affect them but all other retailers too. A customer is only concerned with getting the product at a cheaper rate - whether it's from Amazon, Walmart, or another store.

It gets difficult to draw a fine line when you lower your price to match your competitor, and they further lower prices to win the sale. This cycle may continue which is not desirable for a retail business at all.

Probability of Losing Customers 

Offering price match is a tricky job. If your policy is not easily understandable and has loopholes, you’ll lose customers. For example, you cannot price match other retailers' daily, seasonal sales, or membership offers. That’s just the business ethic. But if your policy fails to communicate, you’re in big trouble. 

Even when you deny price matching for more than one item, your unhappy customers will eventually buy the same product from other retailers, and may never come back again. Therefore price matching can cause risk to your business and customer relationships, if not maintained properly.


Here’s the bottom line, price is always at the top of mind for consumers. Major retailers like Amazon & Walmart have made it to the top because of this major reason. They succeeded by offering quality products at competitive pricing. Price matching is by far one of the most effective ways of improving sales and winning customers loyalty. However, if not done properly with important considerations, you could end up in a difficult situation to choose between maintaining profitability or keeping customers loyal with lower prices.