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Amazon is Slowly Shifting Away From List Prices

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Discounters, take note. Amazon wants to stop pulling the wool over consumers’ eyes.

The online behemoth has “quietly” cut back on “list prices,” also known as the manufacturer’s suggested retail price (or MSRP), a New York Times report Sunday said.

List prices are often included in marketing material to make consumers feel like they’re getting a good deal. They’ve also been the subject of several class-action lawsuits by angry shoppers who feel they were tricked.

The Times noted that, in many cases, Amazon now makes no mention of a list price. The reason: it doesn’t need to.

“When Amazon began 21 years ago, the strategy was to lose on every sale but make it up on volume,” Larry Compeau, a Clarkson University professor of consumer studies, told the Times. “It was building for the future, and the future has arrived. Amazon doesn’t have to seduce customers with a deal because they’re going to buy anyway.”

Pricing specialists said Amazon started eliminating list prices about two months ago. For instance, Calvin Klein men’s modal trunks in black are now listed at a take-it-or-leave-it $22.40. The same goes for a Hanes men’s five-pack of boxer briefs, priced at $25.99. But a six-pack of Gold Toe men’s cotton crew athletic socks is offered at $15.98, a 20 percent discount off the list price of $20.

So, Amazon has shifted its pricing strategy on some products, but it’s in test mode as it tries to figure out what tempts browsers to buy.

“Amazon is showing it can fix the problem if it wants to,” Bonnie Patten, executive director of TruthInAdvertising.org, told the Times.

Though list prices aren’t illegal, Federal Trade Commission (FTC) rules state that a store’s products must be openly and actively sold at the regular price for a “reasonably substantial period of time” before being discounted. Michael Kors, Kohl’s, T.J. Maxx and J.C. Penney have all been in the line of fire for alleged false advertising—using fake “compare at” prices—in the last year.

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