26 replies to this topic

[Legocrazy81]

As the sub title says. Does anyone know why they have it? More than just more money for them kind of answer. Is it some way to pay for the licenses with other companies? If so, why then do they have the TRU tax on CMFs...

Edited by Legocrazy81, 10 April 2012 - 04:39 AM.

[Hinckley]

Legocrazy81, on 09 April 2012 - 06:08 AM, said:

As the sub title says. Does anyone know why they have it? More than just more money for them kid of answer. Is it some way to pay for the licenses with other companies? If so, why then do they have the TRU tax on CMFs...

What are you even asking? Why things have tax? Purchases get taxed. It's how the government runs.

[prateek]

Honestly I don't think there is much reason except MOAR MONAYYY!
They know if they keep releasing the sets before anyone else, and keep their shelves stocked, people will keep coming back for more even though they're not happy about it.

[cerebus76]

Hinckley, on 09 April 2012 - 06:16 AM, said:

What are you even asking? Why things have tax? Purchases get taxed. It's how the government runs.

I think he means to ask why Toys R Us marks up their prices over suggested retail price.  I think the answer is that they do it because they can, and because it increases profit.  Some bean counter somewhere crunched some numbers and found that they made more money by doing it that way.  I don't think it's the wisest idea in an age of price scanning comparison apps on smartphones, but I'm sure that Toys R Us's customer demographic is more non tech savvy parents and grandparents who don't know better.  I don't think that this will work out for them long term. In fact, I don't think that the large specialty retailer busines model in general will be viable for much longer.  There is too much competition, especially online, to sustain these giant specialty stores.

[Hinckley]

Thank you. That makes more sense. Perhaps, it could be phrased more coherently next time.

[LEGOman273]

prateek, on 09 April 2012 - 04:53 PM, said:

MOAR MONAYYY!

Exactly!

[Mr Copperhead]

I'm not sure it's just more money.  It allows them to do the buy one get one 50% off sales, give you points if you are a club member and still make a profit.  If you wait for those and buy things of equal value for your 50% off item(s) you can come out ahead of Walmart or Lego Store prices (even including Lego Store's points).  Although I still normally buy at the Lego store, they have a better selection and it's fun to buy from people who really like Lego

[Big Cam]

1. Exclusivity- Toys R Us has had a deal with LEGO for some time now to occasionally get an exclusive set. They are also one of the, if not the only preferred stores to buy LEGO, according to TLG.

2. Advertising -  Toys R Us regularly advertises LEGO, probably part of their deal with TLG. All that advertising money has to be made up somewhere.

3. Moar Money - Toys R Us is a greedy corporation, who sucks. (personal opinion)

4.???

5. PROFIT.

[Legocrazy81]

Hinckley, on 09 April 2012 - 05:13 PM, said:

Thank you. That makes more sense. Perhaps, it could be phrased more coherently next time.

My fault. I thought the term "TRU tax" was commonplace here...

[blue banana]

I have never seen a Lego set at my local TRU that was overpriced, they are just as everywhere else and sometimes they have this "buy 3 get 1 free" or "-20% on all Lego over 50€". May I ask in which part of the world this taxes seem to occur? The only bad thing I can say about "my" TRU is that they put the new collectible minifigs in small plastic cases that were once used to hold Nintendo DS games to prevent people from getting the figures they want.

[sharky]

It is my understanding that TRU pays for the privilege of selling sets first before other retail stores, so maybe the mark up is due to the extra premium they pay.  Also, they seem to quite often put sets on sale by as much as 30%, so perhaps marking them the rest of the time is a way to even out the profit margin.  I do notice that they tend to mark stuff up more during the Christmas season as well.  I believe it's because they know that people feel obligated to get the gift their kid wants even if it means paying more than MSRP.

Personally, I simply have patience and wait for other stores to get the sets.  If it's a TRU exclusive I wait for a sale.  As far as Christmas, I shop way ahead of time and get it on sale.  I got the Hillside House when it was on sale and saved it for my daughter's Christmas gift.

[The_Chosen_1]

The Toys R Us case is simply a matter of a company being more greedy than it should be.  The "TRU tax" isn't just a problem with LEGO, either.  I used to collect Star Wars action figures, and there is a substantial markup in that category as well.

Quite frankly, TRU is lucky that there are still so many ignorant consumers out there who will shop in their stores simply because it's the biggest toy store around (speaking for 90% of parents out there, not necessarily AFOLs).  I personally believe that's one of the only things keeping them around.  If Toys R Us were, say, an electronics store that offered products at a 10% markup over MSRP, their business model would tank pretty quickly.

As for the Christmas markup, don't get me started there....that's corporate greed at its finest.

[Legocrazy81]

I'm afraid I'm one of those buyers. I have a Target that's close to the TRU, but the selection pales in comparison. I don't have a LEGO store within about a 2 hour drive... And I hate waiting for stuff from S@H . So, I bite the bullet and shop at TRU. I'm flawed...

Edited by Legocrazy81, 12 April 2012 - 03:55 AM.

[Sir_Basil_Ashton]

Legocrazy81, on 09 April 2012 - 06:08 AM, said:

As the sub title says. Does anyone know why they have it? More than just more money for them kind of answer. Is it some way to pay for the licenses with other companies? If so, why then do they have the TRU tax on CMFs...

As already stated, it's all about turning out a higher profit.

cerebus76, on 09 April 2012 - 05:00 PM, said:

I think he means to ask why Toys R Us marks up their prices over suggested retail price.  I think the answer is that they do it because they can, and because it increases profit.  Some bean counter somewhere crunched some numbers and found that they made more money by doing it that way.  I don't think it's the wisest idea in an age of price scanning comparison apps on smartphones, but I'm sure that Toys R Us's customer demographic is more non tech savvy parents and grandparents who don't know better.  I don't think that this will work out for them long term. In fact, I don't think that the large specialty retailer busines model in general will be viable for much longer.  There is too much competition, especially online, to sustain these giant specialty stores.

Their greed will eventually catch up to them and result in their demise. I often wonder how Toys R Us can survive as a business in today's marketplace.

Mr Copperhead, on 09 April 2012 - 05:53 PM, said:

I'm not sure it's just more money.  It allows them to do the buy one get one 50% off sales, give you points if you are a club member and still make a profit.  If you wait for those and buy things of equal value for your 50% off item(s) you can come out ahead of Walmart or Lego Store prices (even including Lego Store's points).  Although I still normally buy at the Lego store, they have a better selection and it's fun to buy from people who really like Lego

Agreed, once in a great while you can come out ahead purchasing LEGO at TRU. However, most retailers beat them out when they have the same sales as TRU.

sharky, on 11 April 2012 - 06:56 PM, said:

It is my understanding that TRU pays for the privilege of selling sets first before other retail stores, so maybe the mark up is due to the extra premium they pay.  Also, they seem to quite often put sets on sale by as much as 30%, so perhaps marking them the rest of the time is a way to even out the profit margin.  I do notice that they tend to mark stuff up more during the Christmas season as well.  I believe it's because they know that people feel obligated to get the gift their kid wants even if it means paying more than MSRP.

Personally, I simply have patience and wait for other stores to get the sets.  If it's a TRU exclusive I wait for a sale.  As far as Christmas, I shop way ahead of time and get it on sale.  I got the Hillside House when it was on sale and saved it for my daughter's Christmas gift.

TRU does have sales on LEGO quite often. I always wait to get TRU exclusive sets until they're on sale. Throw in some Rewards Dollars and it sweetens the deal even more.

The_Chosen_1, on 11 April 2012 - 08:06 PM, said:

The Toys R Us case is simply a matter of a company being more greedy than it should be.  The "TRU tax" isn't just a problem with LEGO, either.  I used to collect Star Wars action figures, and there is a substantial markup in that category as well.

Quite frankly, TRU is lucky that there are still so many ignorant consumers out there who will shop in their stores simply because it's the biggest toy store around (speaking for 90% of parents out there, not necessarily AFOLs).  I personally believe that's one of the only things keeping them around.  If Toys R Us were, say, an electronics store that offered products at a 10% markup over MSRP, their business model would tank pretty quickly.

As for the Christmas markup, don't get me started there....that's corporate greed at its finest.

The thing that drives me the most crazy is when I see Grandparents buying LEGO for their Grandchildren at TRU. I even go out of the way to tell them sometimes that they can get sets cheaper at other retailers. Some appreciate and some give me dirty looks.

When I think about it, I think the one thing TRU has going for it, is the fact that it's a toy store. You could go to retailers such as Target and Walmart but their toy selection pales in comparison to TRU. It's like comparing the size of the average LEGO SW fan's Clone Army to mutley777's Clone Army. Plus to young kids, the experience of going to TRU is awesome. And during the Holidays, TRU has a bigger selection than retailers and it's easier to shop there then waste your time shopping from store to store.

Bottom line, TRU has their mark-up because they get away with it and as long as they get away with it, they'll continue to do it.

[The_Chosen_1]

Sir_Basil_Ashton, on 12 April 2012 - 04:38 AM, said:

Bottom line, TRU has their mark-up because they get away with it and as long as they get away with it, they'll continue to do it.

Exactly.  As much as we try to explain it away, that's all it really comes down to.  I have to call BS on excuses like "they have to pay a fee to LEGO for getting product early".  LEGO is getting just as much out of it as TRU is, because they know there are collectors who will rush out and buy sets at TRU as soon as they become available, regardless of the "TRU tax".

[Big Cam]

Legocrazy81, on 12 April 2012 - 03:55 AM, said:

I'm afraid I'm one of those buyers. I have a Target that's close to the TRU, but the selection pales in comparison. I don't have a LEGO store within about a 2 hour drive... And I hate waiting for stuff from S@H . So, I bite the bullet and shop at TRU. I'm flawed...

For me my time is worth more than an unnecessary toy tax.

[autobrick]

I don't understand why this 'TRU tax' is such a big deal; just buy from any of the other retailers selling Lego.

It is nothing compared to the 'not-America tax' that the Lego Company applies to the rest of the world (30-50% more).

(Sorry, couldn't resist bringing up that old chestnut, especially when Americans complain about high prices).

[Churchill]

I've bought plenty of sets from TRU.  Sometimes I've regretted the higher price, but hey, I made the decision, I have to live with it.  As some have said, it's a convenience issue.  I have a Walmart and a Target locally, and I get to the Lego store occasionally, when I'm in other cities.  I can always order from Shop at Home.  Honestly, sometimes I'm just in the mood to buy Lego, and I'm near TRU.  Done deal.
I wish they didn't have the markup, but I'm not going to complain about it.  They are a business, just like Lego, in the business to make money.  I don't think it's worth complaining about, considering there are people who are on Eurobricks who don't have the Marvel sets yet, or who are paying twice as much as me.  After all, I walked into TRU on a Sunday, on Easter, a holiday... and I bought Capt America.  How can I complain?

[dr_spock]

It is a free market.  Toy r Us can charge what they want.  You are free to buy elsewhere if you are not happy with the prices Toys r Us charges.

[Big Cam]

autobrick, on 12 April 2012 - 11:23 PM, said:

(Sorry, couldn't resist bringing up that old chestnut, especially when Americans complain about high prices).

Please save your generalizations for your own thread on non-American LEGO prices. A question was asked and we are discussing it, that doesn't make every American in this thread complaining.

This is the scenario Americans are used to. It's not our fault that LEGO hikes prices elsewhere. We are used to paying a certain price, when a different retailer charges more, we are naturally going to think it's unfair.

If you find 2 shops in your area and one charges the prices you are used to (inflated or not) and then you find the other shop charges more, you'd think it's a rip off.

If you think that Americans don't have a right to complain then neither do you, the only one who does is the place where LEGO is marked up the most an I mean literally the most. Since in your opinion that person is getting charged more than you, you've got no right to complain.

So until you prove that your LEGO is priced higher than any other place in the world, please keep your American bad mouthing to a minimum.

[autobrick]

Big Cam, on 13 April 2012 - 03:17 PM, said:

So until you prove that your LEGO is priced higher than any other place in the world, please keep your American bad mouthing to a minimum.

Sorry Big Cam, I don't know what I said to offend you. I didn't insult or even imply anything negative about Americans. I just said that when Americans complain about prices, I can't help but point out they already pay the lowest prices worldwide. Where's the bad mouthing?

I don't want to further derail this thread further so I'll put the rest of my response in a spoilers tag.

Spoiler

Big Cam, on 13 April 2012 - 03:17 PM, said:

If you think that Americans don't have a right to complain then neither do you, the only one who does is the place where LEGO is marked up the most an I mean literally the most. Since in your opinion that person is getting charged more than you, you've got no right to complain.

This confuses me. So if A pays $100, B pays $135 and C pays $155 because of some policy, only C is allowed to complain? B can't let out a peep of protest?

Big Cam, on 13 April 2012 - 03:17 PM, said:

So until you prove that your LEGO is priced higher than any other place in the world, please keep your American bad mouthing to a minimum.

This is one is easy:
10193 Medieval Market Village
99.99 USD
134.99 CAD = 135.18 USD
(MMV was initially 149.99 CAD = 150.30 USD)

10218 Pet Shop
149.99 USD
199.99 CAD = 200.41 USD

4427 Fire ATV
5.99 USD
7.99 CAD = 8.01 USD

Just visit Brickset and click on the 'More...' link for almost any set released recently (only those have their international pricing uploaded).

According to Yahoo USD and CAD have been at near parity (+- 5%) for nearly the last three years. Basically, if you live close to the border, it is cheaper to cross it and buy Lego in the United States (even with the 'TRU tax').
I'll admit that other countries like Australia/New Zealand have it worse. Once you factor in taxes for Canadian prices, it is about the same as European prices.

Like I said, I put this in spoilers because I don't want to derail this thread.

[Ricecracker]

I'm closing this for a bit before it gets out of hand. I'll reopen it later if we can stay on topic.

The pricing difference between countries is an issue that has been beaten to death. There are a number of reasons for this, from transportation costs and import tariffs to the general state of the economy and standard of living. That is not what this topic is for.

This is about stores trying to take advantage of the uninformed consumer. It happens. Clearly, Toys 'R' Us in the US does this, and I too can think of a certain toy store here that does it. It's not an American-only issue.

Let's try to stay on topic later when it's reopened.

[Big Cam]

Sorry for skewing this thread off topic. Autobrick I may have overreacted a bit and I apologize, I guess I took what you said personal. No hard feelings.

[Ricecracker]

Feel free to discuss the topic at hand again.

[TheLegoDr]

I try to only buy Lego at a discounted price (because I'm cheap), but I do end up paying full price for things quite often. TRU does not allow too many discounts, so I rarely shop there. The last time I went in there was January to see if they had the new series 6 Minifigures. They didn't at the time and were selling series 5 for $3.49 instead of $2.99 like at Wal-mart/Target, so we left and haven't been back. Not only does the local TRU charge more for the Lego products, they also have a much smaller supply than the cheaper stores nearby. Ultimately, if we had a Lego Brand store near here, I would do all of my shopping exclusively there, unless there was an unbelievable deal elsewhere. Again because I'm cheap, if Lego offered free shipping over a certain price like some other retailers, I would order from S@H regularly too. Especially since it only takes 2 days from the time I order until it's on my doorstep. So even though some people shop at TRU because of convenience or availability, I choose to shop elsewhere and am willing to wait on most things. Plus, the TRU in my town is on the north end of town, not the most convenient location either.