I’ll never forget that first–and last–time I purchased a store-brand jar of salsa, thinking there was no way it was any different that the $0.30-higher-priced name-brand jar. Then with my first dip, I bit into a twig. From that point forward, I was ready to pay that extra $0.30 because I then understood that was simply the cost of the name-brand company’s employing a twig picker. I became one of those perhaps gullible consumers who believes that when you pay more for a product, you’re getting a better product. Well, such is apparently not always the case.
Last week, a federal judge in Wisconsin gave final approval to a $65 million settlement in multidistrict litigation brought by consumers who accused 10 companies of conspiring to overstate the horsepower of lawn mower engines. According to an article
in The Washington Post
, the case began in 2003 when an employee of one of the manufacturers walked in to a Minnesota law firm, claiming that he was privy to some interesting information. Specifically, the manufacturers were selling lawnmowers with advertised horsepower of 4.5, 5, 5.5, and 6.75, but all had the exact same engine. Suit was thereafter filed in May 2009.
According to the complaint
, these companies took mowers with identical engines, put different labels on them, and sold them at significantly different prices. Perhaps even more alarming, the suit alleges that several of the companies had created a “Power Labeling Task Force,” which was used to plan and organize the conspiracy. This group allegedly met at various locations and even kept minutes that were distributed when the task force adjourned.
To date, about 340,000 claims have been made. Under the terms of the settlement, class members will receive $35 for every eligible walk-behind mower they own, and $75 for every ride-on mower. The lawnmower companies have also agreed to extend warranties by one year and to change the way they test and report horsepower.
And so it seems that my cost-more, get-more theory may be misguided.