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Bargain Hunters Beware: Most Sale Prices Are Not Discounts

When it’s deliver-or-die, supply chains become the lifeblood of a company. To that end, the fashion industry has embraced technology to navigate today’s hyper-complicated supply chain, with myriad solutions shaping the first, middle and last mile. Call it Sourcing 2.0.

When is a sale not a sale? When an item was never sold at full price to begin with.

According to recent research from Checkbook.org, national chains are deceiving U.S. consumers by slapping stickers touting sale prices on products that have never been sold at anything other than a reduced price.

In June 2014, the consumer organization started tracking prices on a weekly basis on between six and 10 big-ticket items sold at Best Buy, Costco, Home Depot, Kohl’s, Macy’s, Sears, Target and Amazon, and found “disturbing price policies” that are “deceptive and misleading.”

In a report titled, “Sale Fail,” Checkbook revealed that Sears, Kohl’s and Macy’s were the worst offenders: out of nine items tracked at Sears, the survey found that most of them were continuously offered at 40 percent or more off their recommended retail prices over a 44-week tracking period; Kohl’s offered eight of its tracked items at a discounted price more than half the time; and four of Macy’s items were offered at slashed prices at least 70 percent of the time.

“We do not publicly discuss the details of our pricing strategy, however we can confirm that Sears complies with applicable pricing laws,” a spokesperson for Sears told Checkbook in an e-mail. But the association has insisted the store is misleading bargain-hunting customers.

The advertising and marketing of merchandise is regulated by the Federal Trade Commission (FTC), which states 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—but as the Checkbook survey found, retailers rarely heed these rules.

It’s not a new development. Savings.com discovered that the number of deals offered by 31 department stores and apparel retailers jumped 63 percent between 2009 and 2012, while the average discount increased from 25 percent to 36 percent.

In 2012, Jos. A. Bank was sued for using “misleading, inaccurate and deceptive marketing” to lure customers.

Kohl’s and J.C. Penney came under fire two years ago when class-action lawsuits accused the chain of hawking false markdowns, and last week the latter was hit with another lawsuit alleging shoppers were tricked into thinking they were buying discount-price goods.

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