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November 27, 2017

Some Retailers Misled Shoppers on Black Friday Savings

Filed under: Electronics,Internet,Retail — Edgar (aka MrConsumer) @ 5:53 am

[Note: The next new Mouse Print* story will be December 11.]

For both Black Friday and Cyber Monday sales, retailers know that shoppers love a bargain, so the bigger the savings they can claim, the more sales they will likely ring up. Telling shoppers they can save hundreds of dollars by buying now is potent advertising.

The trouble is some of the discounts claimed are grossly exaggerated, promising illusory savings of $100, $200, $300 and even $600 in the following cases.

Take this Samsung HDTV, model UN55MU6290FXZA, that many major retailers used as a doorbuster deal for Black Friday. It’s a new item that was just introduced in August according to Samsung and was only recently stocked in stores. Some might call it a “made for Black Friday” TV. On Samsung’s own website, it was on sale for $499.99 — a savings of $200 compared to the regular price of $699.99:

Samsung TV Samsung site

A Samsung spokesperson confirmed for Consumer World that the manufacturer’s suggested retail price for this TV is in fact $699.99.


The Good Guys (maybe)


How did major retailers promote this TV around Black Friday?

Among others, Best Buy, Walmart, Amazon, Sears/Kmart, and surprisingly J.C. Penney (which is known for inflating regular prices just to offer goods at big discounts) played it straight. They advertised the TV as being on sale for about $499.99 — a savings of $200. (Of course, we don’t know if all these stores really offered the TV at what they claimed was the “regular price” of $699.99 price for any substantial period of time before discounting it to $499 — a requirement under some state laws.)


Best Buy Samsung TV

Walmart -Samsung TV


Sears Kmart 699-499TV

J.C. Penney Samsung TV



The Other Guys

1. BJ’s Wholesale Club:


At other stores, sellers took some liberties it appears in telling customers how much over $200 they would save if they bought this TV for $499. Early in November, BJ’s Wholesale Club seemed to suggest that its regular price for this TV was $699.99, and once put in the cart, the price became $499.99 — the standard $200 savings.

BJs TV Nov. 3

Then, in promoting its upcoming Black Friday savings event, the BJ’s cover item in circulars now proclaimed that buying this TV for $499 would save customers $300! Miraculous.

*MOUSE PRINT:

BJs Samsung $300 off

How did they do that? Online, BJ’s simply replaced the previous crossed out $699 regular price and changed it to a $799.99 regular price crossed out. Neat trick, huh? Raise the regular price and claim bigger savings.

BJs TV 799.99



2. Target:


BJ’s was not the only seller seemingly playing games with the regular price of this TV in order to make a more dramatic savings claim. Target, which historically has not engaged in questionable pricing practices, appeared to have slipped this time. In their Black Friday week circular, they claimed a regular price of $799.99, and a sale price of $499.99 — for a $300 savings. That is an extra $100 of phantom savings compared to the real list price of this TV.

To make matters worse, on their website, starting on November 19th, they were claiming a $400 savings because their regular price of this TV inexplicably jumped up to $899. (See update at the end of this story.)

*MOUSE PRINT:

Target 799 regular

Target $899 regular



3. Kohl’s:


The inflated regular prices compared to list price didn’t stop there. Kohl’s which has also been accused of inflating regular prices to offer illusory discounts on its merchandise, was selling this TV on its website prior to Black Friday “on sale” for $899.99 — a savings of $100 over its supposed regular price of $999.99. This TV is a key doorbuster in the Kohl’s Black Friday ad, selling for the standard $499.99 sale price but with a savings supposedly of $500 compared to its so-called regular price of $999.99.

*MOUSE PRINT:

Kohl's TV 999-899

Kohl's TV 999-499



4. Shopko:


Lastly, taking the prize for the most exaggerated saving claim is Shopko. They contend that this $499.99 TV on sale was regularly priced at $1299.99 — providing lucky purchasers with a whopping $800 in savings.

*MOUSE PRINT:

Shopko - 1299-499



The Law


Under FTC Guides Against Deceptive Pricing:

If … the former [regular] price being advertised is not bona fide but fictitious — for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction — the “bargain” being advertised is a false one; the purchaser is not receiving the unusual value he expects…

At least under Massachusetts law, “regular price” refers to the seller’s own previous selling price that the store actually offered the goods for. “List price” is different, and cannot be used as a basis of comparison unless a reasonable number of sellers actually offer the goods at that list price.

Now, just because Samsung has established a suggested list price of $699.99 for this TV, doesn’t mean retailers have to sell it at that price. They can establish any regular price they want for goods generally as long as that price is legitimate, meaning it is not substantially above the manufacturer’s list price, is not set artificially high to facilitate a false price drop with huge but illusory savings, and is one that the store openly charges for a reasonably substantial period of time.



Company Responses:


Some sellers, including Samsung itself, really did offer this TV at the full list price of $699.99 at least for a short time. It is doubtful, however, that all the stores that advertised this item as regularly selling for $799, $899, $999, or $1299 ever really offered it at those prices for any appreciable period of time in any of their stores. We don’t know for sure because not all stores responded to our inquiries including BJ’s and Kohl’s. We asked when they offered this TV at the high so-called regular price noted in their ad and how they respond to critics who say that the savings they advertised for this TV were exaggerated.



Target’s Response:


Target did respond, explaining that the $899.99 regular price for the TV was a “system error” and to their credit, they immediately changed their website to show only a $200 savings from the now updated $699.99 regular price.

Corrected 499-699 comparison

The company could not immediately explain, however, why other of their advertised Samsung TVs also had grossly exaggerated regular prices too.



Shopko’s Response:


A spokeperson for Shopko said it was not their policy to inflate regular prices, and was committed to following all laws and regulations. Michelle Hansen, the spokesperson, further indicated that the TV was a seasonal item gotten in for Black Friday and could not say if the store ever offered it at $1299. Of course, this suggests that the only price they ever charged was the $499 Black Friday price and they advertised an arbitrarily high regular price for the TV to attract customers to their big sale.



Final Thoughts


It is time for the FTC and state attorneys general to take action against retailers that have established a pattern and practice of deceiving the public about the actual savings that their customers can achieve when buying advertised items.

And for shoppers, the unfortunate truth is that you cannot always rely on advertising to truthfully disclose the amount of money you will actually save on any particular item.

[Note: graphics were edited for size and to add store logos.]

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15 Comments »

  1. I learned this lesson 35+ years ago. My dad was looking at a Craftsman table saw from Sears. He scoured the newspaper inserts each week and literally saw the exact same saw listed over and over for different “Regularly” prices and different discounts. Interestingly, the final price was not always the same. He ultimately learned how low Sears would go on that saw and bought it accordingly. It taught me not to believe everything I read and maybe even to be skeptical until I’ve done my research. My dad was a very patient man when it came to spending $$. I’m glad some of that rubbed off on me.

    Comment by MikeH — November 27, 2017 @ 6:26 am
  2. Yes, like the previous commenter, I learned this lesson decades ago which is why I always know what my item is really worth before buying it. Thanks to the internet you can easily comparison shop. It doesn’t really matter what the “original” price was, only the discounted price and the lowest one always wins. But I agree that these deceptive practices should be gotten after by our “elected officials”. Too bad they’re too busy tearing each other down to really help the public!

    Comment by Ronnie — November 27, 2017 @ 10:08 am
  3. I’ll say it yet again. Grown men and women from these huge corporations sit around a fancy mahogany conference table devising ways to cheat us consumers. How utterly shameful! Mike H is clearly a savvy guy and knows how to take care of himself when he ventures into the marketplace. But what about all the others who don’t have his level of sophistication? They get royally screwed over and over again.

    Comment by HMC — November 27, 2017 @ 1:13 pm
  4. To be fair, if an item is introduced at a discount, but is planned to have a much higher regular price (this is not just a Black Friday situation, this is a normal tactic for a new item), how would someone indicate this legally?

    On the other hand, I bought my current laptop on black Friday a year ago for $899 from HP with a claimed $600 discount (this was a good price regardless of discounts, so I’m not complaining about that). After pulling the trigger I continued to watch the price through about February. It fluctuated between $899 and $999 during that time period except for exactly a week in mid-December when, sure enough, it was listed as $1499. I notice that the exact same deal is currently live for the exact same laptop still claiming that $1499 is the regular price. So am I to believe the regular price did not drop in a year?

    Edgar replies: BZ… to answer your question. A retailer can do an introductory offer price for a new item, such as something being brought in for Black Friday. They could say “after sale $xxx”, noting this was an introductory offer. They could also indicate a “comparable value” price for a similar quality TV but a different model number.

    Comment by BZ — November 27, 2017 @ 1:21 pm
  5. Honestly when I shop for a ‘big ticket’ item I do some looking around on the internet to find the lowest price. I never pay attention to ‘this is how much you saved’! I make my decision on the final price and can I afford it? If I can’t pay cash for it I don’t buy it.

    Comment by Gert — November 27, 2017 @ 2:04 pm
  6. I for one have never been a fan of crowds so don’t do the mad dash. However, I did take note several years ago, granted this is not a big ticket item but still…. My DH broke his arm and was unable to use the pump type soap dispensers we had been using. Went to BB&B and bought one of the battery operated ones. A couple weeks later there is the black friday ad for the exact soap dispenser for $10 MORE than I had paid at a regular price.

    Yes I do think something needs to be done about deceptive advertising.

    Comment by Nora — November 27, 2017 @ 3:31 pm
  7. This is not new. Been going on for decades, and will continue for decades. In late 70’s, an electronics dealer in Mass, was disciplined for falsely claiming discounted TV prices. These sets had never been offered at the claimed higher prices. I worked there.

    Comment by Len — November 27, 2017 @ 5:22 pm
  8. This is great reporting, and it really is a shame the FTC does not do more to protect consumers from this type of misleading advertising

    Comment by Wayne — November 27, 2017 @ 9:35 pm
  9. Well Edgar you can do this every single year for TV’s at Black Friday time. You only posted about the 55″ Samsung this year.

    The so called 1299 price could have been the initial msrp at launch for the TV although I think that could be a full on inflated price point.

    Comment by Richard — November 28, 2017 @ 1:09 pm
  10. Richard… Samsung provided me with the MSRP… $699.99. No way was it ever $1299 just three months earlier. I don’t even believe this item made it into stores until the fall.

    Comment by Edgar (aka MrConsumer) — November 28, 2017 @ 1:13 pm
  11. This practice of deceptive discounts off of made up or never actually charged MSRPs has gotten so pervasive its become the norm, and unfortunately the law mostly ignores it.

    But so should shoppers.

    The only rational way to shop these days is as follows:
    1. Compare specs from different brands making sure you have the quality and performance level you need.
    2. User reviews (knowing some may be planted).
    3. Professional reviews (knowing some of those may be “paid for”).
    4. Consumer Reports reviews (knowing they are often too critical on some products, like cars, and not critical enough on some others, like cell phones).
    5. Overall product/brand name reliability history(mainly Consumer Reports from their user surveys.)
    6. Anecdotal accounts from friends who have the same product(knowing some people will never admit to making a buying “error”)
    7. Put all that in a blender and see what comes out, and then — look for the lowest price on the brands/models that fir your needs(keeping in mind that, as I have personally discovered, some stores (BJs) and some manufactures (Canon) may collude with each other to sell a product with the exact same model # as the units in others stores, like Staples, Sears, etc. but that lacks some of its features.

    Caveat emptor has never been more appropriate than it is today in our corporation manipulated society.

    Comment by Bob C. — November 30, 2017 @ 4:19 pm
  12. These days stores are typically contractually obligated not to sell a TV below a certain price. So, the “authorized dealers” are all going to have them at the same price.

    Comment by Marc K — December 2, 2017 @ 7:20 pm
  13. The problem is that we all individually keep devising creative ways to combat this issue. Instead of demanding our govt solve it systemically. That leads to a rat race to see who’s smarter and able to avoid overpaying. That’s a race consumers keep losing cos businesses have people whose job it is to do these things. Or you forget to do exhaustive research. Or you’re simply unaware. Either way, businesses win.

    Do other countries have this problem?

    Comment by Tundey Akinsanya — December 4, 2017 @ 6:44 am
  14. “A spokeperson for Shopko said it was not their policy to inflate regular prices, and was committed to following all laws and regulations.”

    Sure, Shopko.

    Comment by Bearcat44 — December 5, 2017 @ 8:52 pm
  15. sadly if the current administration has it’s way any agcency that protects consumers will be dismantled.
    Govt enforcement of any advertising is a joke. all you have to do is watch tv and listen to the claims of every scamming company.

    if the advertisments were honest they would not have so much fast disappearing mouseprint on every ad.

    when you freeze the ads and read the mosusprint you realize it’s a scam.

    look at the ads for knee braces with people who can’t walk yet put on a knee brace and can now runnmarathons.

    our govt has become a joke..,esp in consumer protection issues.

    Comment by riich w — December 5, 2017 @ 9:17 pm

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