How retailers make you think you’re saving money

Smart retailers know that the key to attracting customers is to make consumers think they are saving money. But, just because retailers say they support you saving money, that doesn’t necessarily mean they actually do.

Store owners act as if they aren’t aware of Federal Trade Commission (FTC) guidelines that prohibit deceptive pricing. Local media outlets recently took a closer look at the validity of store sales. What some medias found might surprise consumers. To start, local media discovered that some stores raised their prices just before running a sale.

A sale isn’t always a true price deal

One such case occurred in Portland. KATU captured the story, sharing that, “Over three months, Bailey-Shah and a KATU photographer went shopping at the Kohl’s in Beaverton, Hillsboro and Northeast Portland. They found product after product put on sale only after the price had been jacked up.”

In one instance, the station found that, “a knife set was priced at $99.99. It was on sale that day for $69.99. That seems like a savings of a savings of $30. But we found the original price tag underneath was $79.99, meaning the savings was really only $10.”

AOL ran a similar report about JCPenney, sharing that the national retailer raised prices before running major sales. According to the FTC, “One of the most commonly used forms of bargain advertising is to offer a reduction from the advertiser’s own former price for an article. If the former price is the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time, it provides a legitimate basis for the advertising of a price comparison.”

The FTC also says, “If the former price is set forth in the advertisement, whether accompanied or not by descriptive terminology such as “Regularly,” “Usually,” “Formerly,” etc., the advertiser should make certain that the former price is not a fictitious one.” Like the media outlets did, the only way consumers might be able to spot deceptive sales practices is to frequent the same stores over the course of several months.

Yet, there are ways to tell if retailers are really saving money, not for themselves but for customers. Consumers can also spot a real price savings if they see products discounted to levels they haven’t seen before. For example, people who shop regularly might spot a decorative king size comforter for $20, a price that is generally lower than most comforts cost.

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