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April 22, 2019

Wayfair Called Out on Exaggerated Savings Claims

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:45 am

Wayfair, the large online seller of home goods, had its big “Way Day” sale on April 10th and 11th, promising the “lowest prices of the year” and “up to 80% off.” In the process of checking it out, we discovered often exaggerated savings claims and misleading price comparisons, and not just on Way Day.

Wayfair Way Day

 

Perusing those six categories, some of the discounts seemed too good to be true. For example:

Wayfair memory foam mattress on Way Day

Here they’re claiming this store brand memory foam mattress is on sale for $349.99, marked down from what looks like their $2,100 regular price. That’s 83-percent off, seemingly saving shoppers $1,750!

Many other items were advertised at 40 – 80% off, with some discounts so large as to raise questions about the legitimacy of the savings claimed. To check this out, Consumer World conducted a spot-check of a dozen deeply discounted items from the six categories featured above on April 10, 2019 – the first day of Wayfair’s Way Day 36-hour sale.

Here is the cart with those 12 items:

Wayfair Way Day cart

Scroll down the list.

You’ll see the amazing discounts above that Wayfair was offering.

But the question was, when the Way Day sale was over, would all these items revert to the higher price shown? Or, would you save almost as much if you delayed your purchase or missed the sale and returned later? To find out, we went back the day after the sale ended, April 12, to check the prices of the same dozen items.

Wayfair day after cart

Scroll down the list.

One item we checked was that memory foam mattress pictured at the top of this story. It was on sale during Way Day for $349.99 and was still on sale right afterwards and only slightly higher — $376.99. So customers who purchased that item on Way Day when it was said to be 83% off, really only saved a mere $27.

Wayfair mattress after Way Day

 

All the items went up in price right after Way Day, some by only a little and some by much more. This certainly suggests that the company did lower its everyday prices for the sale and it was a good day to shop there.

But none of the items in our spot-check reverted to the stated crossed out price (the “strike-through price” like the $2,100 reference price for the mattress). In fact, while Wayfair’s claimed savings on Way Day for the items in the sample averaged 71% off, the actual savings on Way Day compared to Wayfair’s everyday prices right after the sale only averaged out to be a 16% discount.

*MOUSE PRINT:

What Wayfair does in their product listings for many sale items, and not just on Way Day, is make it appear that their own regular price is being cut by crossing it out and claiming it is now being offered at an often large percentage-off discount. The trouble is, this is not how Wayfair’s discounts actually work.

Take the mattress pictured above, for example. Is the $2,100 strike-through price really their regular price? Wayfair buries the answer in a 42,000-word page of fine print accessible through an inconspicuous “terms of use” link. Its strike-through price is really the list price or the highest price they ever offered the item, according to that disclosure.

*MOUSE PRINT:

Wayfair terms

The Federal Trade Commission’s Guides Against Deceptive Pricing says that comparison to a high list price or regular price that is rarely charged can mislead buyers as to the discount they actually receive.

Various states have similar false advertising laws. For example, in Massachusetts where Wayfair is headquartered, the company appears to run afoul of state consumer law by not “clearly and conspicuously” stating the basis for its price comparisons and discount claims. Simply put, under the attorney general’s regulations [940 CMR 6.05], when sellers advertise an item as “X% off”, it automatically means the discount is off the seller’s own regular prices – just the way a shopper would understand the claim. If sellers intend the savings claim to be a comparison to any other type of price, they have to finish the comparison — X% off what — such as by stating “83% off list price.” Similarly, putting a line through a higher price suggests it is the seller’s own regular price that is being reduced unless it is labeled otherwise. Wayfair’s product listings fail to make these critical distinctions and disclosures.

And Wayfair has an additional burden. List price comparisons are not even allowed under Massachusetts law unless the seller can demonstrate that a reasonable number of sellers in its trade area actually offer the goods at the stated list price.

We asked Wayfair to comment on our findings and their pricing policies. The company did not respond to two inquiries.

In our view, shoppers are misled when retailers make illusory savings claims based on inflated regular prices rarely if ever charged or by making comparisons to list prices that virtually no one ever pays. Why can’t sellers just play it straight?

Consumer World is turning over its findings to the Massachusetts Office of the Attorney General and other relevant agencies.

The spot-check of prices done by Consumer World is limited in scope, and cannot be used to project the average actual savings on all items during Way Day nor the number of items that did or did not revert to the claimed reference price.

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9 Comments

  1. Good work! I wish we had one of you in every state! People are so quick to clamor about new rules and regulations, but it seems that oftentimes that problem is companies not being held responsible for the regulations that are currently in place. Here is to hoping the MA AG reaches to Wayfair and gets this issue rectified.

    Edgar replies: Thanks for the kind words, Joel. I am already talking to the AG’s office.

    Comment by Joel — April 22, 2019 @ 10:25 am
  2. It baffles me why businesses use these kinds of tactics, especially when there are people like you lurking out there to call them to task.

    A couple of thoughts came to mind as I read the Wayfair blurb:

    “If it looks too good to be true, it probably is.”

    “Caveat emptor!”

    Comment by Bill — April 22, 2019 @ 12:54 pm
  3. We should not pretend to be surprised by this. This is common practice, and we would be fools to fall for it. It’s happened before, and will happen again. No surprise.

    Comment by Len — April 22, 2019 @ 1:40 pm
  4. This comes as no surprise to me, either. Kohl’s is the same way, or appears to be. I go by “what I would pay” for the item. If it looks like a deal (but not a deal too good to be true), I’ll buy, but even that rocking chair was more than I would pay! SO GLAD you’re out there looking out for the consumers – yes, wish there were one of you for every state!

    Edgar replies: Thanks, Cathy for the compliment. The trouble is these kind of practices SHOULD come as a surprise to people because they should be RARE in the marketplace, and not commonplace. State AGs and the FTC need to step up enforcement of the deceptive pricing rules already on the books. With good enforcement, violations should be rare, rather than the rule. And we as consumers should not accept as normal being hookwinked at every turn because “everyone is doing it.”

    Comment by Cathy Burns — April 22, 2019 @ 2:11 pm
  5. In Massachusetts, there has been a major movement away from state government addressing bread-and-butter consumer problems like the Wairfair scam reported in Mouse Print this week. Let’s hope that Massachusetts attorney general Maura Healey will pick up the ball here and enforce her very own regulations. Also, I think this scam would make for a great class-action suit.

    Comment by alto — April 22, 2019 @ 6:52 pm
  6. These companies continue to do this because A. Consumers, unfortunately, are not that savvy and continue to fall for it, and B. Enforcement agencies such as the AG and FTC are lacks in enforcement, particularly here in MA. Wayfair is also a champion of the “price mistake” gimmick advertising enticing items at ridiculously low prices to attract attention and then cancelling the sale but automatically opting in shoppers to their marketing emails. One such incident occurred just last week on a Weber Grill. I guess all these gimmicks are needed to pay for their annoying jingle and ads

    Comment by David Bookbinder — April 23, 2019 @ 12:15 pm
  7. At least there was some Mouse Print in connection to this “sale”. I’ve encountered (and discovered with a phone call to Way Fair) two bait and switch actions with Wayfair, and there wasn’t Mouse Print accompanying the price of an item and the exceptions to the printed price of the item. Knowing what I’ve experienced, I never bother to shop Wayfair for any reason. Thanks for bringing Wayfair practices to a wider audience.

    Comment by Susan — April 23, 2019 @ 4:41 pm
  8. Also Wayfair’s ads show & says free shipping. Fine print says on orders over $49.

    Comment by Donald Brennan — May 7, 2019 @ 2:17 pm
  9. They’ve always done this. As far as I know, all the online retailers that are affiliated with them do the exact same thing (All Modern, Joss and Main, and Birch Lane) and always have.

    I’ve shopped Wayfair for years, not because I think they’re so outstanding, but because I’m disabled and home bound. I try to do a fact check on anything I plan on buying there by checking Amazon, Walmart and Target. Sometimes just a Google shopping search covers it.

    This way I feel like I’m at least trying to be a smart consumer.

    Comment by Donna Hurst — May 13, 2019 @ 2:00 pm

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