Through a special arrangement, what follows is an excerpt of an article from Retail Dive, an e-newsletter and website providing a 60-second bird's eye view of the latest retail news and trends.
For many purchases, it's hard to know what the fair price is. That's in part because of the constant barrage of sales, but also because many retailers aren't really ever charging the "original" price. The listing of discounts over essentially fake original prices is known as "price anchoring," used by many retailers to varying degrees.
But regulators and courts don't like it when retailers take the practice too far because they consider it deceptive. J.C. Penney, where former CEO Ron Johnson was highly criticized for replacing price anchoring with "always low prices," is being accused in a class-action lawsuit of misleading shoppers with most, if not all, of its price tags.
Moreover, a 44-week survey by Checkbook.org of several national retailers found that many items listed as "on sale" rarely, if ever, sell at any other "regular" price. While some conducted valid sales on selected merchandise, Checkbook executive editor Kevin Brasler called some of the pricing policies "disturbing."
"What you need to know is that in many stores the sales just never end, or hardly ever end," Mr. Brasler said to Komo News. "The worst offenders, for sure, were Sears, Kohl's and, for many of the items we tracked prices on, Macy's."
Sources: Macy’s, Sears
In response, Macy's said the survey didn't account for the fact that it promotes "by day, not by week." Pricing for each item is also based on factors including the nature and seasonality of the merchandise, and customer response. Macy's added that some items rarely go on sale prior to final clearance while others go on sale more frequently as part of promotional events.
"Macy's prides itself on offering interesting merchandise which provides great value to the customer," Macy's said in its statement. "We strive to comply with all laws and regulations, which generally allow for flexibility in connection with price promotions to allow retailers to respond to business trends. If a pricing error is brought to our attention, we act quickly to correct it."
Sears responded similarly: "We are uniquely positioned to provide discounts to our members and customers in a number of different, legally compliant ways, including things like member pricing, store or online only promotions, clearance offers, and offers from third-party marketplace sellers. It is unfortunate that Checkbook.org did not appear to take these factors into account before making its assumptions."
- Discount-mania: Are the days of charging full price over? - Retail Dive
- Will class-action suit against J.C. Penney force retailers to pull up 'price anchor'? - Retail Dive
- Sale fail: Survey finds many items rarely sold at 'regular' price - Komo News
- 'Fake' Sales Trick Customers at Major Stores, Study Says - NBC News