Post by jeffolie on Jul 14, 2014 7:13:06 GMT -6
July 14, 2014
This is the sneakiest thing stores do to trick consumers
Stores’ ‘original prices’ are a big, fat lie
By Catey Hill, MarketWatch
Thanks to a combination of slick pricing, frequent couponing and confusing discounting, retailers routinely trick consumers into thinking they got a great deal on an item — when in fact they paid way more than they should have.
Many of the stores that offer the most frequent coupons and discounts also tailor the asking prices of items so that even coupons and sales don’t mean real savings. For example, as of July 11, frequent discounter J.C. Penney JCP +0.57% advertises that the “original price” of its Ninja NJ600 Blender is $145.00 and that it’s now on sale for $99.00. Meanwhile, at Target TGT +0.45% , Bed Bath & Beyond BBBY +1.16% and Best Buy BBY -1.97% , that blender is listed at and selling for $99.99 and at Amazon AMZN +0.49% it’s listed at $109.99 and selling for $96.35. “Shoppers are usually attracted to the magnitude of the sale — 30% off always looks better than 15% off — but retailers can fairly easily increase the list price of an item to make the discount appear deeper,” says Matthew Ong, a retail analyst with NerdWallet.com .
“Original prices, as well as sale prices, are set individually by each retailer’s merchant team based on their customer base, sales events, promotional calendar, etc, therefore prices will vary retailer to retailer,” A J.C. Penney spokeswoman told MarketWatch.
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Kohl’s KSS -1.08% , which “almost always” has a coupon code available, according to data from DealScience.com, does it slightly differently. They sell the KitchenAid Artisan Five-Quart Stand Mixer for $449.99, which is typically $100 or more higher than competitors. The KitchenAid website — as well as Target.com and HomeDepot.com — sell it for $349.99. “Consumers would have to have a coupon of $100 off, or 22% off, at Kohl’s to even get the Stand Mixer for the same price as the base price at multiple other stores,” says Ong. “Even with a great coupon or deal from Kohl’s, the consumer still may not beat out what he or she could have gotten with a smaller value coupon at a different store.”
As of press time, Kohl’s had not yet responded to a request for comment. And it’s not just Kohl’s and J. C. Penney that are employing various tricky pricing tactics: MarketWatch found evidence of this at other major chain stores as well.
So why are stores employing these tricky pricing tactics? These discounts and coupons drive store traffic, but the stores can’t afford to always sell their items at a true discount, explains Greg Smith, the chief creative officer at The VIA Agency, which counts a number of large consumer brands among its clients. So instead, they sometimes manipulate the prices of the items so they can offer a “discount” but not lose too much money by doing so. “The places that do this the most, coupon [and offer deals] the most,” says Smith.
Of course, there are still deals to be had at these places: Plenty of times, the original price is legitimate or the coupon or promotion will actually offer a true discount. And sometimes convenience trumps all. When you’re already in a store and need an item immediately, it may be worth it to you to pay a little more. Furthermore, there are some indications that consumers like couponing and price changes: When former J.C. Penney CEO Ron Johnson decided to cut back on coupons and promotions , among other pricing moves, sales tanked .
Still, this price manipulation means that consumers need to be savvy when they’re shopping, says Ong. He recommends that shoppers check the price of the item they want in multiple locations, including Amazon, a big-box store or two like Wal-Mart WMT -0.31% or Target and a couple of stores where they regularly shop. Andrea Woroch, a consumer savings expert at Kinoli , says that she likes sites like PriceGrabber, TheFind and Google Shopping for price comparisons (be sure to compare shipping rates as well — FreeShipping.org is good for that) and if you’re in the store, she says that price comparison apps like RedLaser or Snaptell are best. (Ong cautions, however, that you can’t just rely on one price comparison site, as they’re often not comprehensive.)
Try to combine those offers with coupons (Woroch likes CouponSherpa.com and Coupons.com, both of which have apps) to find the truly lowest price. Be sure to clear your cookies when you’re price-searching as retailers sometimes lure new shoppers with low initial prices, but if you come back the price may have changed, she adds.
If you don’t need the item right then and there, there are other ways to save. Woroch likes the Hukkster browser add-in, which sends you alerts when specific items go on sale or a coupon becomes available, and adds that you may want to consider naming your own price on an item at Greentoe.com (if it’s available there). She also says you should know when to buy items: Summer clothing and accessories are often on sale now as retailers try to make room for fall items, for example.
Finally, if you do realize that you’ve overpaid, all may not be lost. Some stores — like Banana Republic and Gap GPS -0.78% — will do a one-time price adjustment if you see the item you bought on sale within two weeks of purchase