Wednesday, November 26, 2008

Beware of False "Sales"

The other day, I read about a hidden camera investigation that discovered that two retailers were re-labeling products with higher price tags than the original then claiming to mark them down to "liquidation" pricing. How common is this, and is it worth it for retailers?

Coincidentally, I was shopping with a friend this past weekend when I commented that a rack that claimed to offer "buy one, get one half off" blouses had obviously hiked up the price tags of the shirts first, making the supposed deal quite sour indeed. How did I know? Because it's a store I've shopped at before, and am privy to what the pricing normally is.

I understand fine print: the whole idea of grabbing customers in by advertising "SALE" in big letters in the store window, only for them to realize when they get close that below the gargantuan word is a line that reads "on some items", or something to that effect. But downright deception -placing fake tags on product - is just wrong.

As mentioned above, I suspected the possibly deceptive pricing at the store this weekend only because I am a relatively frequent shopper at that retailer. Is it worth it to lose your loyal customers just to grab money from a few unsuspecting one-timers? I'd think not, but perhaps this activity is more prevalent than we realize.

In fairness, this particular hidden camera investigation targeted a pair of retailers (yes, Circuit City was one of them) that were already going out of business (or closing some stores, at least) and were now being handled by liquidators. In the case of Circuit City, the reporters were lucky enough able to compare pricing in the "liquidation" stores with actual, still-in-business Circuit City locations. You can already guess which stores had the better pricing.

Still, hopefully this story will make other retailers think twice before relabeling products before a sale; whether it'll be your last in the business or not. As for consumers, be weary of "liquidation" sales: it appears that you're often better off shopping at regular stores that are offering you regular deals.

The full story of the investigation is a really interesting read, and provides some really useful insight into what could happen once a company is on its last legs. I'll bet you think twice now before you head down to a so-called "liquidation" sale!

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Lee_D said...

This is a serious issue, and it's also illegal. A couple of major Canadian retailers have had to pay multi-million dollar fines in recent years for false advertising as a result of playing games with their sale pricing.

duck_man said...

My wife works at a grocery store run by Loblaws that does this regularly. A $4 item is $5 in "10% off day" so in reality people 'taking advantage of the sale' are paying MORE.