Today’s retail competition is nothing short of ferocious.
While many stores battle bankruptcy threats, they must also go toe to toe with new, web-savvy competitors almost daily.
So the pressure is on to keep prices low and the discounts flowing. That is, until shoppers catch on.
Consumers’ Checkbook, a nonprofit with publications in seven cities, sent a team of four to conduct weekly price checks on more than 350 items at 19 major retailers over a 10-month span. The team discovered “disturbing” pricing at 17 of the 19 stores sampled.
“Many sale prices — even those that advertise big savings — are bogus discounts, with the same price called a sale price more than half the time,” the report, led by executive editor Kevin Brasler, stated. “For several chains Checkbook found most items we tracked were offered at a false discount every week, or almost every week we checked.”
Checkbook discovered “usually misleading” sales at JCPenney, Kmart, Kohl’s, Macy’s, Neiman Marcus and Sears, which offered sale prices more than 75% of the time.
“At Neiman Marcus and Sears, 10 of the items we tracked at each retailer were on sale every time we checked for 10 times,” the report noted.
Add up the offenses of all 17 of the 19 retailers examined and you’ll find that items were listed as “on sale” 57% of the time, “meaning that more often than not they promoted prices as discounts that weren’t really special prices,” the report explained.
The only two retailers to pass the deceptive pricing test were Costco and Bed Bath & Beyond, both of which “consistently conducted legitimate sales.”
The organization found similar results when it conducted a test in 2014 and 2015, though that study was smaller and included fewer stores.
“This practice of having constant sales is much more prevalent than it was three or four years ago,” Brasler said by phone.
He said that appliances, mattresses, and rugs and carpets are some of the long-standing worst offenders for being on forever-sale.
Sales Quest: Savvy Retailers vs. Smart Shoppers
Consumers’ Checkbook claims the practice of consistently offering sale prices manipulates shoppers.
“If something is being offered at a 60% discount, what’s the point of comparing prices elsewhere?” Brasler’s summary of the report asks.
The Penny Hoarder noted this deceptive pricing influence during our annual review of Black Friday advertisements. When we cross-checked major retailers’ ads against manufacturers’ suggested prices for big-ticket items, we found there weren’t too many deals worth waking up early to grab.
Eric Jones, co-owner of deals site Best Black Friday, said clothing, small appliances and home goods are often on sale in part because we keep buying them to use in everyday life.
“Those really good deals draw you in, and stores hope you’ll pick up some hand towels or a T-shirt” or another item that helps them make up the profit they lost on the sale item, Jones explained.
His site has conducted comparisons to see which stores repeat deals every Black Friday (Answer: almost all of them). But the Black Friday moniker is showing up at other times of year now, from Spring Black Friday at home and garden stores to Prime Day shoved into the middle of summer.
Repeated sales delude shoppers into thinking they can get good deals all the time, Jones said.
“You can’t have a good deal every single time,” he explained. “That’s not a sale price, that’s just a regular price.”
Jones’ top tip for sleuthing deals over duds: Check a retailer’s price against Amazon. If it’s similar or lower, it’s probably a good deal.
“It’s clear that retailers know they can’t complete on price with online competition,” Brasler said. “It’s not just competition with Amazon, but other outlets, too. They can’t compete on price so they create the illusion of having low prices.”
And it works.
Brasler said major retailers have more and more data available to confirm that offering constant sales works to drive traffic — at least for now.
“Everyone is guilty of this as a shopper,” Brasler said of falling for these ploys. “Everyone wants to feel like they got a bargain, that they can afford to buy more.”
Lisa Rowan is a senior writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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