[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:
A Samsung spokesperson confirmed for Consumer World that the manufacturer’s suggested retail price for this TV is in fact $699.99.
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The Good Guys (maybe) |
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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.)
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The Other Guys 1. BJ’s Wholesale Club: |
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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.
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:
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.
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2. Target: |
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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:
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3. Kohl’s: |
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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:
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4. Shopko: |
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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:
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The Law |
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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.
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Company Responses: |
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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.
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Target’s Response: |
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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.
The company could not immediately explain, however, why other of their advertised Samsung TVs also had grossly exaggerated regular prices too.
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Shopko’s Response: |
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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.
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Final Thoughts |
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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.]
