Op-Ed: The tangled logic of SONY, Microsoft and Nintendo saying they’re not obliged to refund  tariffs to consumers

The general weirdness of gaming companies in their godawful public image and consumer relations takes some beating. In this case, a simple statement has been turned into an offhand dismissal of customer interests.  

The gaming industry as a whole is infamous for its insensitivity to gamers. No amount of criticism penetrates the mystique of odd decisions. The corporate culture is its usual brattish self. The gaming hardware sector is typically even less receptive.

The fact is that in this case they’re theoretically right to say they’re under no obligation to refund the price differences.

This is the irritating bottom line:

The illegal tariffs were struck down by the Supreme Court.

Refunds of tariffs were payable to the importers.

There’s probably no direct mechanism or any sort of legal status to connect consumer payments to refunds in relation to tariffs.

Consumers are third parties in these transactions and not directly involved in the payment of tariffs.

Looks simple enough, doesn’t it? However…

According to Game File, the console makers independently raised prices as the tariffs took effect. That is exactly what was predicted and expected before the tariffs were introduced.

They simply passed on the cost of the tariffs to consumers. That’s what tariffs do, and it’s one of the many reasons tariffs are such an appallingly bad idea.

The other problem is that the tariffs have become so heavily politicized. Nobody with a theoretically functional brain cell wants to get involved in US politics on any level.

Any position the gaming companies took on the tariffs would be potentially hypersensitive and utterly useless from a business perspective. More to the point, it would have absolutely no impact on the legal situation.

The tariff refunds are generating a lot of news in all sectors. The gaming sector is currently getting most of the heat, but there’s no serious suggestion that consumers will be beneficiaries of the refunds.

Meanwhile, using the same legal argument, SONY and Microsoft are trying to get consumer lawsuits in California dismissed. There’s a caveat in that specific points of the lawsuits may merit court examination.

It’s trickier than it looks:

Were consumers disadvantaged in any way?

Did they suffer financial losses are a result of the price rises the tariffs caused?

What about point of sale price issues, retailers, and the supply chain?

Can you prove that consumers have a right to refunds?  

You’d have to look at each lawsuit on its merits. The possible legal technicalities are staggering. So would be the outcome, if a court decided the claimants or anyone else in the distribution process had a right to refunds.

Clumsy PR doesn’t help, and Panic did give direct tariff refunds

The gaming companies apparently aren’t content to simply be right about the subject. They seem to feel a need to rub it in the faces of customers.

It’s easy enough to sympathize with consumers hit with a double whammy of increased prices and no comeback. An arbitrary political policy created a situation that raised prices, and consumers were hit with the inevitable costs.

How is that not understandable? Wouldn’t the most junior salesclerk get the message? Even if they’re wrong, could they simply take their business elsewhere, based on this response?

Another issue not being addressed by anyone is that the refund process could be very messy.

How do you estimate a refund under these conditions?

Date and proof of purchase, date of price increase, or just a flat refund of X dollars per unit?

What about store credit, the faithful standby when you don’t want to actually pay a refund?

It’s all doable, but it’s clunky to say the least.

It so happens that the makers of Playdate, Panic, have actually refunded tariff surcharges to customers after receiving a government refund.

Panic ”priced the tariff surcharge as a separate line item at checkout clearly labelled, clearly distinct from the product’s base price — so that buyers knew precisely what they were paying and why,” according to Tech Times.com.

You’ll notice the amount of information available to consumers and the method of identifying the costs. This type of price management is at cash register/bookkeeping level. It’s also good business practice to isolate charges when necessary.

It’s doable in other accountancy and reseller/affiliate modes, too. But to scale, it’d be an epic journey for the big companies, and expensive to do with added processing costs.

Panic’s move makes the important point that tariff refunds can be paid on a discretionary basis.

They can at least claim to have acted in the financial interests of their customers.

It’s more than a friendly gesture, too. It’s a statement of principle that SONY, Microsoft and Nintendo have completely missed.

Semi-comprehensible legal arguments don’t add up to cash back for customers.

Perceived hostility to customer interests is no selling point for future business.

How does locking the customers out of the equation turn into better business?

The big gaming companies should be focusing on the market’s best interests and not missing the point so thoroughly.