Price Increase Following Deposit & Part Payment

Tim76 · 21-01-2022 7:02pm #1

Hi all,

I ordered a bike last May which I was told would arrive in June on 2021. Delivery has been delayed & delayed and the bike is now due to arrive next week. But this is not my main gripe.

Since the initial deposit that I paid in May, a bike to work scheme has been paid against the original price and another substantial part payment made. I agreed with the bike shop that I would pay the outstanding balance once the bike had been shipped and this outstanding balance was clearly stated.

The issue I have is that since i originally ordered the bike until now (delivery time) the manufacturer has increased the price of the model for 2022 and the bike shop is now trying to pass on this price increase on to me. This seems like pretty sharp practice. I feel like they are penalising me for their late shipment.

Anyway, anyone know if I have a leg to stand on here? Does a deposit mean that the bike shop is under any kind of legal obligation to sell me the bike at the original price?

Thanks in advance

Al Wright · 21-01-2022 7:31pm

Once the seller accepted deposit/part payment (legal term 'consideration') for goods at stated price, a contract has been made. From the information given you appear to be entitled to demand that the seller completes the sale at the price listed at time deposit was taken.

[Deleted User] · 21-01-2022 7:32pm

Yeah I'd have thought the shop had two choices here, sell you the bike at the agreed price or refund you.

magicbastarder · 21-01-2022 7:38pm

this is the second time this has come up in a few weeks.

if you have a written record of a deposit being paid, which states the purchase price of the bike; and there is no clause stating the price of the bike may rise, that forms a contract with legal standing.

https://www.boards.ie/discussion/2058226837/bike-shop-price-increase-after-paying-deposit

Tim76 · 21-01-2022 8:34pm

As the bike has been on order since last May, I'm reluctant to ask for the deposit and payments to be refunded to start the process all over again with a different LBS. Besides, how would a refund to a BTW scheme work? That would need to go back to my employer and then to me I'm guessing, but how is the tax side dealt with?? Am I excluded from participating in the scheme again for another 5 years? It seems messy.

I have an email thread going back to April with the bike shop where the price is confirmed by them as well as a 10% deposit of the list price to secure the order. There has been months of over and back since regarding the BTW, an additional part payment and the multiple revised shipment dates but there was never any contract terms to speak off. I'm guessing this is bad news for me and will play in their favour.

I noted in their last email that they are now referring to the bike as the 2022 model. I had ordered the 2021 model which is the exact same spec, there have been absolutely no upgrades for 2022 - the only difference is the price increase. I am assuming that when they placed the order for this bike initially it was for the 2021 model at the 2021 wholesale price and they are now trying to pull a fast one or am I just being cynical??

I have contacted them for comment since I received the invoice earlier but no response yet.

callaway92 · 22-01-2022 10:43am

Would love to see if this is a trend for people using Bike To Work scheme. I had something similar happen 2 years ago where it was fully paid up (and my monthly paycheck was being deducted), and the delays and non-responses became a disgrace (delays somewhat understandable) but they tried then to force a few extra €€ onto the end price when items came in. I’m not hugely knowledgeable on bike items so just went with a ‘cheaper’ helmet/light/bike lock in the end that fitted into the original price.

Wasn't please at all and made sure to leave the fair reviews.

Mr. Cats · 22-01-2022 11:55am

Just looking at it from the bike shop’s perspective for a moment, it’s likely that they ordered the 2021 model when you paid deposit/BTW. Because of supply issues, they only received the bike in 2022, and it’s now 2022 model. The wholesale price charged to them for the 2022 model is likely higher than 2021 model, so the bike shop has a legitimate cost increase on their side.

I think they could argue that they agreed to supply you with the 2021 model at the agreed price. They haven’t been able to source that stock. Therefore you should be provided with a full refund if you so wish.

The bike shop is offering you the 2022 model instead at the new RRP but you are under no obligation to accept. You can still get a refund I think if you prefer. This is ignoring all the B2W ‘messiness’.

Where this line of reasoning might fall down though, is should the bike shop have taken a deposit where there was a reasonable chance that they couldn’t supply the bike? I’m not sure but it sounds like they made it clear they would need to order it from distributor at time of purchase.

Moving away from the legal side of things, I think it would be worthwhile to have a chat with shop to see if there’s any goodwill gesture they could provide in the circumstances. From any bike retailer that I’ve chatted with, the margins are not that wide, and B2W may further eat into it. Their wiggle room might depend on if it’s a more or less expensive option.

It seems to me that the bike shop isn’t really trying to pull a fast one, they’ve just been caught in the supply chain clusterfvck. But like most customer service topics, it’s how they approach the resolution that matters to you either feeling you’ve been hard done by or there’s an understanding that it’s been outside their control. Again, some goodwill gesture here goes a long way.

Tim76 · 22-01-2022 12:40pm

The bike shop responded today and stated the reason for the price increase (€300) is that they are now supplying the 2022 model instead of 2021, as I suspected. The revised price is in line with the manufacturer's RRP for 2022 but the bike shop have however agreed to meet me halfway on the increase - so i'll now be looking at an additional €150

Looking at things with a cooler head this morning and after reading Mr. Cats' measured response and I think this may be the best outcome. Even though there has been zero change to the spec between models if the wholesale price has increased for the LBS, I can see where they are coming from - albeit begrudgingly!

The refund/legal route here sounds like it will be a very messy & protracted affair, I think I'd prefer to spend that time out cycling!

Mr. Cats · 22-01-2022 1:30pm

I think it’s a good result & most importantly now you have your new wheels! Enjoy the ride!

magicbastarder · 22-01-2022 1:46pm

i wonder what the situation is with bike shops and them placing the orders with their wholesalers - is there an agreed price, and is the agreed price subject to change?

Etc · 22-01-2022 8:41pm

I know that bike shops are working off a tight margin and are at the mercy of the manufacturers and distributors, depending on the size of the shop and their purchasing power they may have very little leverage and given the current supply/demand situation he’s probably taking a hit as well so it sounds like both of you are taking the pain.

It’s the same across the board, it’s amazing how quickly you’ll forget €150 when you go on your first spin !

Enjoy the new bike, especially as spring is coming !

Tim76 · 24-01-2022 9:17am

Think this is the best i can hope for tbh. If i take the refund (messy and all as that would be) and go elsewhere I will be paying the for the full increase anyway, as well as waiting months for the bike to be delivered - some shops are advising on 12 month lead times at the moment for road bikes. Plus there is the added complication of the Bike to Work scheme and whether I would qualify again.

Thanks to everyone for their contributions and mind yerselves on the road!

8valve · 25-01-2022 9:44pm

https://www.boards.ie/discussion/comment/118516772#Comment_118516772

I know with our suppliers, it's a case of 'suck it up, princess', if we order bikes and the price increases before delivery.

Bicycles and components wholesale prices, like everything else that originates in the far east, are at the mercy of shipping costs, which are a total clusterfu(k in the last couple of years.

I won't even mention stuff coming from the UK since Brexit. That's clusterfu(k, squared!

Seth Brundle · 26-01-2022 2:10pm

https://www.boards.ie/discussion/comment/118516772#Comment_118516772

I'd be very surprised if the manufacturers or wholesalers didn't have clauses in the sales agreement that they can change products and the LBS will need to pay any increase in cost.

I'm just surprised that many LBSs don't seem to use this when they make an agreement with a customer

Cee-Jay-Cee · 26-01-2022 2:22pm

Does the 2022 bike at least have a new paint scheme or is it identical to the 2021 bike?

I think the €150 is a good compromise and more so if the bike is in 2022 colours (and you actually like it)

Weepsie · 26-01-2022 2:29pm

https://www.boards.ie/discussion/comment/118535097#Comment_118535097

Probably because there are some consumer protection laws preventing them. It would result in some sharp practice too from some places.

Tim76 · 26-01-2022 9:21pm

https://www.boards.ie/discussion/comment/118535142#Comment_118535142

Nope, not even a new paint job. Absolutely identical to the 2021 model. I cross referenced the specs when the 2022 model came out first just in case I was missing out! Only upside that I can see is that if I am ever selling it I can say it is a 2022 bike instead of a '21

Anyway, it arrived into the shop today, is being built on Saturday and I'll be picking it up next week - finally! It's been a long wait since last April.

MojoMaker · 27-01-2022 10:11am

Hmmm...made in 2021 but delivered in 2022 = 2022 bike?

€300 up in price? What a swizz.

Mind you the car companies have been operating like for generations I suppose.

callaway92 · 29-01-2022 7:37pm

Been absolutely shafted here OP

Cabaal · 30-01-2022 10:40am

I think the bike shop have been reasonable, I don't envy them. They are in a awkward situations and margins are so slim and delays are happening left right and centre with shipping costs increasing for parts and the bike itself. It's a **** show basically.

fat bloke · 30-01-2022 12:05pm

Margins are slim?

Isn't margin on bikes and components like up to 45%?!

cletus · 30-01-2022 12:16pm

https://www.boards.ie/discussion/comment/118553717#Comment_118553717

Suppose it depends on whose margins? Manufacturer, wholesaler, retailer? Or is that figure 45% spread across all three?

fat bloke · 30-01-2022 12:31pm

https://www.boards.ie/discussion/comment/118553758#Comment_118553758

Retailer!

cletus · 30-01-2022 12:38pm

I'll caveat this and my previous post by saying I know absolutely nothing about profit margins in bicycle retail.

On a 2 grand bike, a shop is making €900?

That seems a bit on the high side. Let's say I buy a Giant Revolt for 2,000. Retailer takes 900. That's 1,100 back to Giant, who have to pay for the actual manufacturing, and component purchasing for the bike, on top of whatever the wholesale setup in a given country is, and then take profit off the top. That has to cost more that 200 per bike, which means the Giant are taking less profit than your local lbs?

Cabaal · 30-01-2022 12:54pm

https://www.boards.ie/discussion/comment/118553821#Comment_118553821

seems a very high margin, where are you getting 45% from exactly? Any source to support this claim that factors in the current situation?

Also is it a online store or B&M store. Outlay for B&M for rent/rates etc is going to be higher.

End of the day costs have massively gone up, if you are shipping a container of bikes or parts from China to EU now its many times more then it cost two years ago.

standardg60 · 30-01-2022 12:58pm

https://www.boards.ie/discussion/comment/118553858#Comment_118553858

They're taking way less than the retailer, but are probably shifting a 100 times more bikes in a given week, so they still make more

fat bloke · 30-01-2022 2:07pm

Well higher value stuff is more margin rich obviously but as an example a mate was looking at a set of one piece carbon bars for 700 quid that the shop get in for 350

magicbastarder · 30-01-2022 3:04pm

is that the basis on claiming that a bike shop has a near 100% markup on bikes?

Weepsie · 30-01-2022 5:17pm

The cost for one distributor getting their container delivered tripled last year from something like 5000 to 15000. So that's playing a role too

Cabaal · 30-01-2022 5:28pm

https://www.boards.ie/discussion/comment/118555324#Comment_118555324

People forget that,

Casati · 01-02-2022 8:38pm

https://www.boards.ie/discussion/comment/118553858#Comment_118553858

It would be more like €660 profit on a €2000 bike i.e. a 50% markup.

The real margin is on the cheap stuff like tubes or lights where a 200% or 300% mark-up is common

Price Increase Following Deposit & Part Payment

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