The History Of Eddie Antar's Fair Trade Law

In the 1970s the “fair trade law” was in place requiring consumer electronics retailers to sell merchandise at the same price. This would prevent any form of price competition from forming. This would put small business, such as Crazy Eddie’s, at a disadvantage. Small business couldn’t afford to purchase the amount of advertisement that larger retailers could. This provided Eddie Antar, the owner of Crazy Eddie, the motivation to circumvent the law. Eddie began to price his products below the industry norm. This was viewed by the customers in a great way, resulting in a large loyalty from his customers. In 1972, the “fair trade law” was removed and many consumers viewed Eddie as a “retail revolutionary”. This was around the time Crazy Eddie began to flourish. This gave Eddie the motivation, opportunity, and rationalization to capitalize on his fame. This is also known as the fraud triangle.
Eddie Antar created this culture within the company of us against “them”. “Them” was defined as anyone who doesn’t agree with Eddie, especially the government. He didn’t agree with giving the government a portion of his hard earned money, sales tax. This resulted in the scheme of skimming all cash sales. This was the first of many illegal schemes Eddie

This is a huge issue with the government. Eddie would pay quite a few of his employees “off the books” to avoid paying payroll taxes. This would also avoid paying income tax, social security tax, and sales tax. This would inflate his gross profit making Crazy Eddie appear superior when benchmarked against his competitors. The “bait and switch” was practiced and implemented by the sales employees at Crazy Eddie. The first step would be to get the customers inside the doors with an item in mind. Then the sales team would pressure and encourage customers to switch and purchase unnecessary items and warrantees that were higher profit