Big retailers have started to rethink their price matching policies across the board. Target dropped external price matching in July 2025 after they realized their blanket policy was just eating into profits and it didn’t make customers any more loyal to them. Best Buy adjusted their strategy to make sure that the margins stay safe on important products. But they’ll still match prices in a few select categories.
You can match prices and protect your margins. Profitable retailers manage to protect their bottom line and to stay competitive at the same time. They use a framework to decide which prices to match and which customers deserve priority and when the conditions make it worth it to compete. This separates the businesses that do well from the ones that slowly bleed out trying to compete with everyone on everything.
Here’s how you can match competitors’ prices while protecting your bottom line.
Hidden Costs That Come with Price Matching
The discount you give to a customer is where your costs start. When a customer asks you to match a competitor’s price, a person on your team has to verify it’s legitimate first. This takes time – sometimes a lot of time. One of your employees needs to pull up the competitor’s website or call their store to check everything. They have to verify that the product is the same and the price hasn’t changed since the customer last checked.
All this chips away at your profit. But none of it shows up anywhere on the receipt. A single price match request can take as much as 15 minutes of staff time. Dozens of these requests each week mean that the labor cost alone might wind up costing more than the discount you just handed out.
Transaction fees compound the problem. When a customer pays with a credit card, you still have to pay the processing fee on the full original price – even though your profit margin already took a hit. A couple of percentage points might not sound like much and yet they add up fast if you have razor-thin margins.
The problem goes deeper than just losing profit on one sale. When customers learn that they can always get you to match whatever price they find, you’re teaching them to shop around first. What happens is they’ll visit your store to check out the product in person, ask your staff a few questions and then pull out their phone to find it cheaper elsewhere. Your store turns into the place where customers browse and compare as your competitors make the sale.
Inventory planning takes a hit too. When you don’t know what price you’ll actually get, it gets much harder to calculate margins and it’s hard to know what’s worth ordering. Most sellers stock up on products and believe that they’ll move at full price. But then they have to match prices way down to break-even or worse.
Run the numbers and the costs add up fast. Your average discount is the start – add in staff time per request (at their hourly rate) and processing fees on top. Also account for customers who would’ve paid full price without the option to match. All together, that’s the true cost per match and for most retailers, it ends up two to three times higher than the discount alone.
Rules That Make Price Matching Work
Price match policies need a bit of groundwork if you want to roll them out to customers. What matters most is to be upfront about where you’re willing to match and where you’re not, because profit margins can disappear pretty fast without real limits in place. One strategy that tends to work is to ask for exact model numbers before you agree to match a competitor’s price.
The next step is to check if the competitor actually has that product in stock when they’re advertising that price. Plenty of retailers will leave old pricing up on their site even after they’ve run out of inventory. This happens a lot more now. You also want to make sure that they’re an authorized dealer for the brand. Marketplace sellers and random third-party vendors work with different cost structures and that means their pricing isn’t apples-to-apples with yours.
One solid way to handle this is to narrow down your price matching to just your top three to five direct competitors. It’s not realistic to monitor every store that carries similar products – and frankly, it’s not necessary either. Focus on the businesses where your customers actually shop and the ones that they bring up when comparing your prices.
A time limit on your policy can help quite a bit with this. Have your customers bring in proof of the competitor’s price within 7 days of their buy or before they buy from you. A window like this stops you from matching promotions that have already ended or seasonal sales from way back when, and it also makes the process easier on your team. Nobody wants to spend time tracking down and verifying prices that are months old.
Different locations and customer bases create their own problems for any business, and it makes sense to review which parts actually apply to your own situation before copying whatever another retailer is doing. Some of these points will matter more to you in your market, and others might not be all that relevant to what you’re dealing with.
Calculate the Total Customer Value First
The immediate loss on that sale might sting a bit. But it helps to look at the total value that customer could bring to your business over a few months and years.
The calculation for this works out to be pretty simple. Take the number of times your average customer buys from you in a year and multiply it by their average order value. Then you’ll want to look at how long they usually stay with you as a repeat customer. A single customer might cost you $20 to acquire. But if they’re spending $2,000 with you every year, they become worth much more to you after just a few months of repeat purchases.
Amazon loses money on tons of sales every day and they do it because they’ve already done the math. A customer who buys one discounted item at first could soon become a loyal buyer who places dozens of orders every year for the next 10 years. That early loss ends up paying for itself multiple times over in the long run.
A few reliable signs can tell you who’s actually worth making the exception for. Business accounts that place large orders on a regular basis are usually the first ones worth looking at. Repeat customers who come back to you month after month deserve attention as well. Customers who bundle your accessories or higher-margin products alongside the discounted item matter here too.
You might give the same price match to a first-time deal hunter as you would to a customer who’s been loyal to your store for years. One of them might disappear after that first sale and never come back. The other one has already proven their value to you over time.
Once you can tell the difference between these customer types, the pricing decisions get much easier. Price matches make total sense for customers who show signs of loyalty and long-term value. For everyone else, it pays to be more selective about when you’ll actually match. The best strategy is to have some system in place – something that helps you review which type of customer is in front of you before you agree to line up with their competitor’s price.
How Smart Pricing Tools Protect Your Margins
Automated tools have changed price matching for retail stores over the last few years. Software programs like Prisync or Intelligence Node will monitor your competitors’ prices around the clock and they can adjust your own prices automatically based on whatever settings you want to set up for them. The manual trial and error gets taken out of the equation completely, so your pricing strategy can respond to market changes in real-time without needing someone on your team to manually check dozens of different competitor websites each day.
You can make automation work for your business if you start with the floor prices based on your costs. Those floors work as guardrails for the whole system – without them, your prices could drop low enough that you’d actually lose money on each sale. When you program these minimum prices into your software, it doesn’t matter how far down a competitor slashes their price. Your store won’t go below the threshold that you need to stay in business and turn a profit.
Another helpful feature is that these tools will flag unusual pricing patterns that probably aren’t worth your time to match – like when a competitor suddenly drops their price by 60% on a popular item. Your system can send you an alert that it’s likely a data error or maybe just a short flash sale. From there you get to choose if it makes sense for your business to match that price or if you’d rather just wait it out and see how it plays out.
Flexible pricing builds on this and lets you adjust prices on other products in your catalog to balance out the ones that you’ve already matched. The system can bump up the prices a bit on related accessories or complementary products to help make up for the difference when you drop the price on a high-demand item to stay competitive. Some retailers also use these tools to match competitor prices only during their busiest shopping hours or just for the customers who usually shop around and compare prices before they buy. This selective approach helps you stay competitive in the areas where it counts without slashing your profit margins across each item in your store.
Add the Services Customers Actually Want
Best Buy has a price matching policy that’s solid and you should pay attention to the strategy behind it. Walk into one of their stores and ask them to match a competitor’s price on a laptop or television (or just about any electronics) and they’ll honor it every time, with no questions asked and no hassle whatsoever.
The interesting part comes next. Best Buy takes those price-matched electronics and bundles them right in with their Geek Squad services. Customers come in for that TV at the matched price and by the time they leave, they’ve also added on installation help or picked up an extended warranty to go with it. The TV itself might sell at a lower margin. But the whole transaction still ends up profitable for the store.
Any business can adapt this same strategy to create better deals for customers. Write down the services and extras that your customers actually care about and get excited over. Free installation adds real value for anyone who has just purchased a brand new appliance. Extended warranties matter to customers who invest heavily in expensive power tools. Exclusive accessories that your competitors don’t carry make your package way better than the bare-bones alternative.
Smaller retailers have done this for years. A local bike shop will agree to match an online price and then they throw in free tune-ups for the entire first year. A furniture store matches whatever their competitor charges and then throws in white-glove delivery along with a full room setup on top. These extras cost you money to deliver. But they help you keep your profit margin on the total sale and that’s what counts.
What matters most is to work out what you have that Amazon or the big-box stores just can’t match. Maybe it’s the expert advice that your team gives when a customer walks in and needs help to pick the right product. Same-day delivery anywhere in your area is another one. Or a pretty generous return policy with personalized follow-up service that makes customers actually want to come back.
Start by making a list of everything that you do differently from your competitors. From there, you can narrow your options to what your customers care about and are willing to pay for.
Different customers value different extras and when you match what you’re great at with what they want, price matching won’t hurt your profits nearly as much.
Products You Can Safely Discount
Your best bet is to look at products where your supplier relationships give you some wiggle room. Some categories have better pricing just because you’ve been with those suppliers for years, or maybe you order enough volume that they give you a better rate. These are your strongest candidates for price matching since you can reduce your margin a bit and still keep your profitability where it needs to be.
Work out the difference between products that get customers through your door and the products that actually pay your bills. Price-match the popular items and you’ll bring in new customers who also pick up some of your high-margin products as they’re in the store.
Price matching can work two ways, and it all depends on if you have a plan or not. Match prices on a popular item to drive foot traffic and you’re making a smart business move. The margin on that product could be slim. But you’ve already done the math – most of these customers will browse around and pick up some other items with better margins. Without a solid plan though, all you’re doing is handing over profit with nothing to show for it.
Go through your product catalog and label which items belong in which category. Some products are strong candidates to price match because they create excitement and you have the supplier support to back them up. Other products need to stay at full price because they’re the ones that keep your business running. When you make this split, it’s way easier to respond to competitor pricing without second-guessing every choice or worrying whether you can afford to match.
Convert Your Foot Traffic Into Extra Revenue
At this point, you have everything you need to match prices when it makes sense, while you hold onto the margins that pay the bills and support your staff. Retail giants probably have bigger budgets. But it works just as well for smaller operations. The trick is to stay disciplined about your criteria and feel comfortable if you have to say no – because sometimes you should refuse a price match. Retail success won’t go to the stores that match every price. Success will go to the operations that match the right prices for the right customers at the right time.
If you want to make your retail space more profitable, pricing isn’t the only way to get there. At ecoATM, we help businesses bring in extra revenue and attract more customers to your stores at the same time. We’ve collected over 50 million devices so far and create thousands of customer interactions every day across our locations. There’s plenty more that we can do together. If you’re ready to turn those old phones into money for your business, contact us and we’ll show you what an ecoATM kiosk could do for your location. We also have wholesale device options if you need to get your team set up with quality pre-owned tech. Businesses just like yours make this happen every day.
