Is It Really a Sale?


Public Policy Fellow
Staff Attorney


We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Maureen Mahoney on Tuesday, October 13th, 2015

Sales can be irresistible. It’s hard to ignore ads promising 50% or even 75% off a t-shirt or a pair of jeans – even if you hadn’t planned to make a purchase! It sure seems like you’re getting a good deal.

That’s why you should be aware of some of the gimmicks and gotchas of retail pricing. Recently, several retailers have faced class action lawsuits over their pricing practices.

What’s the problem? Can’t stores set prices however they want? Not it if misleads consumers into thinking they’re getting a better deal than they are.

Kohl’s and JC Penney are currently facing new class action lawsuits in California over their pricing practices. In the Kohl’s case, the plaintiffs allege that the pricing for their in-house lines is misleading. According to the complaint, one plaintiff “purchased a Jennifer Lopez (a KOHL’S exclusive brand) Dress advertised with a price of $70.00. The dress was claimed to be ‘on sale’ for $21.00 – an alleged 70% discount.” But, the plaintiff says, the dress had not been priced at $70 in the last three months. Both plaintiffs say that they never would have purchased the goods if not for the advertised sale.

JC Penney is facing a similar suit over the pricing of their in-house and outside brands. The plaintiff argues that she purchased goods that were purportedly marked down from $30 to $17. According to the plaintiff, however, those goods hadn’t been priced higher than $17.99 during the previous three months.

And retailer TJ Maxx is facing a lawsuit over its “compare at” pricing signs. TJ Maxx sometimes prices goods and also lists a higher price, marked “compare at” – which may give the impression that the product can be found at the higher price at another store. In this case, one of the plaintiffs bought two Jessica Simpson-brand purses for $24.99 each, labeled “Compare At $48.00 + UP.” But the plaintiffs argue that the “compare at” numbers are arbitrary, making the goods appear to be worth more than they actually are.

These complaints suggest that sales have a powerful effect on consumer behavior. What can you do to avoid getting tricked into thinking a sale is a better deal than it is?

The Federal Trade Commission (FTC)’s tips for shoppers include:

  • Look around for the best deal.Check out prices in other stores to see how they measure up.
  • Research prices online.Some websites compare prices across retailers to help you find great deals.
  • Verify the return policy. Make sure there aren’t strings attached to sales, like restrictions on returning marked-down goods.

Have you encountered any sales that left you wondering whether they actually offered a good deal? Share your story here!

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