Ping cancels accounts with local golf stores(For military discounts)

Ping cancels accounts with local golf stores By David Westin | Staff Writer Thursday, September 28, 2006

A prominent golf equipment company's stance against retailers discounting its products has angered two area golf shops that give military customers a break.

Because of the military discounts, Bonaventure Discount Golf in Augusta and Gordon Lakes Golf Course on Fort Gordon no longer receive Ping products. And even if they could, they would refuse to sell them now.

Karsten Manufacturing Corp. of Phoenix, Ariz., which has a registered trademark on the Ping brand, discontinued its Bonaventure and Gordon Lakes accounts in August.

In a letter to the shops, Ping said Bonaventure and Gordon Lakes discounted Ping clubs below Ping's "Improved Fitting, Internet Transactions and Price Policy."

Both shops give 10 percent discounts to military members on all purchases. Gordon Lakes does it for active and retired servicemen; Bonaventure gives the discount for active servicemen.

Bonaventure owner L.D.Waters received his closure of account letter Aug. 7. Gordon Lakes head pro Bill Fumai got his letter Aug. 22.

"They cut off Bonaventure? That's huge," Mr. Fumai said. "If they cut off Bonaventure, they probably cut off a lot of shops. It must be nice to be in the position to cut off your customers."

Mr. Waters, a 77-year-old former Marine who served in World War II and the Korean War, started giving the military discount about a year ago when he noticed servicemen in his shop who were being deployed to Iraq.

"I'm doing it for those boys putting their lives on the line," Mr. Waters said. "I know they don't get paid enough."

"That's the craziest thing I've ever heard in my life, especially now," Mr. Waters said of Ping's policy. "It just burns me up that they won't allow the military to get a 10 percent discount."

Gordon Lakes, whose membership is 98 percent military, has always given discounts to active and retired military members, Mr. Fumai said.

Bonaventure and Gordon Lakes didn't hide the fact that they gave discounts to the military. However, along with their closure of account letters, Ping enclosed a receipt from a customer at each shop who received the military discount. That led to the cancellation of their Ping accounts.

"It's like the gestapo is back; they're checking receipts to see what we sell it at," Mr. Fumai said. In Augusta, where so many active and retired servicemen reside because of the proximity to Fort Gordon, Ping's move has struck a nerve.

"I've been doing this for 30 years, and this is the first time I've seen a company do this," Mr. Fumai said. "Why do they care?"

"It's something we put in place to protect our brand," said Bill Gates, Ping's director of distribution and associate general counsel.

According to Mr. Gates, no exceptions can be made when it comes to shops selling their clubs under the suggested price listed in their agreement (there is no contract).

"It's something we apply to all of our accounts consistently, and we don't have exceptions to it," Mr. Gates said. "We don't sell direct to the public; we sell to retailers, and we do have certain policies in place with them. Those policies are confidential between us and the account."

Mr. Gates did say that once a retailer buys Ping products, they own them, but must abide by their unwritten agreement with Ping.

If Mr. Waters and Gordon Lakes have been discounting Ping clubs to the military, why have they been cut off now, and both within 15 days of each other?

"It's something that's been in place for several years," Mr. Gates said of the no-discount rule.

"They have had it for years, but didn't pay attention to it because their business has been off," said Mr. Waters, who believes Ping is now enforcing the rule because "they've been hot the last few years."

Mr. Gates pointed out that Ping has more than 1,000 employees and has maintained its operation in the United States while other golf companies have moved overseas, where labor is cheaper.

None of that soothed Mr. Waters or Mr. Fumai, who believe an exception should be made that allows discounts for those with military ties.

Mr. Fumai was so angered when he got the letter from Ping that he took the "$3,000 to $4,000" worth of Ping merchandise in his shop and marked it down 50 percent.

Mr. Fumai said when customers ask him about why he doesn't have Ping merchandise, "I tell them the story.

"They are shocked that they can tell us what price to sell to soldiers. That's terrible," he said.

When Gordon Lakes was cut off by Ping, Mr. Fumai called Bill Sport, the golf program manager for Army Sports.

"He said over half of the 63 military golf courses have been cut off," Mr. Fumai said.

Said Mr. Gates: "I understand the desire of Mr. Waters and the pride they (Bonaventure and Gordon Lakes Golf Course) have in being associated with the military, absolutely. Ping has the upmost respect for the people in uniform and all the sacrifices they make and their families make. This is not about any particular group."

Mr. Waters, who says he has about $100,000 in Ping inventory, plans to have a sale soon.

"I'm going to sell it close to cost," he said. "I'm going to unload them just to get the name out of here. I'm going to sell it until it's gone."

In Ping's account closure letter to Gordon Lakes, the company wrote that the account "may or may not be reopened in a year," Mr. Fumai said.

"If they're going to dictate what I sell to servicemen, to heck with them. I don't need them," Mr. Fumai said.

"I don't want to be put back on because I wouldn't have the product," Mr. Waters said.

It ends a 48-year relationship that Mr. Waters has had with Ping, which was founded by Karsten Solheim in 1962. Mr. Solheim died in 2000.

"Old man (Karsten) Solheim used to come in a store I had with my brother in Savannah in 1958," Mr. Waters said. "I've been doing business with Ping since Ping went into business."

PING'S LETTER Excerpts from the letter Bonaventure Golf received from Bill Gates, PING's director of distribution and associate general counsel:

"Please do not call your field representative regarding the following ... When PING adopted the iFIT Pricing Policy, it unilaterally decided to close accounts that sell a PING product for less than its Blue Column Price. As a result, Account Number 16906 is closed effective immediately. ... Thank you for the time and effort you spent promoting the PING brand. We wish you the best in your future efforts promoting the game of golf."

Mr. Gates is a liar. He states that Ping has maintained its operation in this country while other companies has moved over seas.

I just purchased some Ping G5 woods. I did not like the grips so I replaced them. When I pealed off the original grips there was a sticker that stated "HEAD MADE IN CHINA, SHAFT MADE IN CHINA, ASSEMBLED IN CHINA".

I love these woods and was planning on buying a set of G5 irons but this article has changed my mind.

I looked on their website for an email address, but couldn't find one. Here's their customer service number. Let them know what you think.

1.800.474.6434. They're open 8-5 Monday-Friday MST

I hate to agree with Ping, but I understand its position. Ping has 1000's of retailers all of who have agreed to the "no discount" policy. If Ping allows some of them to offer discounts to Military or anyone else, then it opens itself up to a lawsuit from its other distributors.

I agree that it is a shady practice and that it should be written into a contract with retailers, but if it is applied across the board I have a hard time working up any anger over it. Now if it comes out that they knowingly allow others to receive discounts then the anger directed at them would be justified.

Ping has the right to choose the retail price of the clubs it sells. Retailers can't arbitraily choose a group of people and give them special rates (well, they can, but not if they made an agreement to sell a product at a certain price). My friend worked for Panasonic and had to sanction retailers who were blowing out their products since they needed to control the retail price and having one or two retail outlets underselling everyone else wasn't fair to the other retailers who abided by the agreement.

The military gets special treatment. That's just the way it is.

Says who? If companies like Ping want to give them special treatment, that's fine but surely you aren't saying that we should mandate retailers and wholesalers to provide better prices to the military than the public at large.

If a store buys a product, it is up to that store what they sell that product for. If there is an agreement otherwise its a pretty stupid one IMO.

Nope, not true at all. They have retailing and licensing agreements with the manufacturer who has the right to set prices on it's products. If the store doesn't like it, they don't have to carry the products, the decision that the two stores in question have made.

This is not news. Ping will cancel your account for ANY discount. There have been stories where they cancel big dollar accounts when they find out they have given $5 off a new club that somebody has hit once or twice. It is right in their agreement, NO DISCOUNTS, NO EXCEPTIONS. Yes they are Nazi's about it, but its a free country, and they are a private company. You don't like the policy, don't buy their clubs.

Bingo. This isn't an uncommon arrangenment between manufacturers and retailers.

Ping has 1000's of retailers all of who have agreed to the "no discount" policy. If Ping allows some of them to offer discounts to Military or anyone else, then it opens itself up to a lawsuit from its other distributors.

Yup. And then other retailers could give discounts to gays, Democrats, or whatever other segment of the population they wish to favor. And then Ping has a problem with thousands of retailers all selling their clubs for different prices to different people. This seems pretty basic to me - I should be surprised at all the people who are complaining about this but there seems to be a knee-jerk reaction here to any story that involves servicemen or veterans.

Ping was losing zero money. The retailer was discounting his profit.

This would only be true if that retailer was the only outlet Ping had. Ping has an interest in having it's retailers sell it's product at a consistent price. If that doesn't happen, it will affect profits in the long run. And it's not just Ping - damn near any manufacturer will insist on setting the price for their product. If the retailers don't like it, they don't have to carry the product.

Ping has the right to choose the retail price of the clubs it sells.

Sure...if it owns the retail sales process. If it's selling to third-party retailers, however, I should think its retail pricing rights are sold to the retailer with the merchandise.

If it's selling to third-party retailers, however, I should think its retail pricing rights are sold to the retailer with the merchandise.

Nope. And as I mentioned, it's not just golf clubs - it's pretty much any big manufacturer item. Pretty much all of those sales you hear about for electronic, sports or other equipment must be approved for the retailer by the manufacturer. It's not in a manufacturer's best interest to have a whole bunch of stores selling their product to different people for different prices, for obvious reasons. For instance, a discount golf store could decide to take a loss for a few months on it's clubs to put a local seller out of business.

I don't dispute the fact that Ping has a right to enforce it's pricing.

If I am the first car at a four way stop, I have a right to proceed through the intersection. But if an eighteen wheeler is speeding through the intersection, I would be a fool to try to enforce my right away.

Likewise, in this case, I think Ping is foolish by enforcing their right because the costs outweigh the benfit. Millions of consumers have the right to hold this against Ping, and many of them will. If one of their competitors seizes upon this blunder and offers a blanket military discount they will rake it in, and not just from the military.

It has everything to do with discounts that are in conflict with Ping's stated policy.

Some policy:

According to Mr. Gates, no exceptions can be made when it comes to shops selling their clubs under the suggested price listed in their agreement (there is no contract). "It's something we apply to all of our accounts consistently, and we don't have exceptions to it," Mr. Gates said. "We don't sell direct to the public; we sell to retailers, and we do have certain policies in place with them. Those policies are confidential between us and the account." Mr. Gates did say that once a retailer buys Ping products, they own them, but must abide by their unwritten agreement with Ping.

I smell BS.

You said: It is right in their agreement, NO DISCOUNTS, NO EXCEPTIONS. Yes they are Nazi's about it, but its a free country, and they are a private company. You don't like the policy, don't buy their clubs.
***

I agree, it is a free country, and people are free to stop buying Ping products if they like. Freedom is not free, as they say. Ping should have thought ahead a bit on this one, but they are free to do what they will-- and suffer the consequences.

"Blades - but first you have to hit them. Thats why 95% of us do not use them something to do with the sweet spot"

Cast iron cavity backs, rewarding mediocrity with undeserved results. just like the democrats do.

Cast iron cavity backs, rewarding mediocrity with undeserved results. just like the democrats do.

Ouch, now that hurts! Please don't make me go back to my blades - I could work the ball better with them, but at least 2 or 3 times a round, I'd hit them a hair close to the toe and could feel the vibrations running up through the top of my head! : )

Retailers like those dropped by Ping are the ones who offer the discount, and there's a lot of other retailers that offer servicemen/women a discount, that's just the way it is.

Ping has every right to drop the retailers. The patriotic buying public has every right to tell Ping to go to Hell.

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