American Consumers love a sale, and retailers know it.  Shoppers love to think that they’re getting a great deal on a product…and retailers are more than happy to tell them what they want to hear, even if it means stretching the truth to make a point.  Fake Sales….they’re everywhere.  Who’s doing it?   Well, it’s easier to identify the retailers that don’t do the take sales.

Fake Sales - The Consumer Team Investigates

Fake Sales – The Consumer Team Investigates

Big retailers love fake sales.   T.J. Maxx and Marshalls were the subject of a Class Action lawsuit charging that the retailer tricked customers into thinking that they were getting a super discounted value because the ‘compare at’ prices on merchandise were so much higher than the sale price.  Kohl’s and Jos. A. Bank have been taken to task for their sales practices.  Even Hobby Lobby, the squeaky clean retailer out of Oklahoma City, has been called out for fake sales.  In fact, in a settlement with the New York Attorney General, Hobby Lobby agreed to pay civil penalties.

To illustrate how much consumer love a sale, let’s consider the case of J.C. Penny.   Several years ago, J.C. Penny decided to abandon sales in favor of an everyday low price strategy.   From a transparency standpoint, everyday low pricing is a more credible way to price products.    However, the customers didn’t like honesty and Penny’s sales tanked.  J.C. Penny ultimately returned to ‘door buster sales’ and their business has improved.   Consumers love sales!

Some lawmakers and consumer advocacy groups believe more laws are needed to protect us from fake sales.   Just put the hammer down on the retailers and they’ll behave, right?   I think we need less government regulation and more consumers that are smart enough to recognize a bad deal.  Being smart starts with understanding the fact that sales are rarely sales….they’re retail promotions designed to drive revenue.  Once you get over the fact that sales aren’t real, then you can start getting good deals.   Then you can start voting with your feet.

The fastest way to identify the lowest price on a product is the online bots that compares prices. Websites such as Bizrate, DealTime, MySimon, Price Grabber and Shopping.com are ‘one stop’ sites for price comparison.  Based on the information you enter into the site, it will search the web for the best deals.

Consumer Team's Pete Thomson: "More than regulations, we need informed consumers to vote with their feet."

Consumer Team’s Pete Thomson on Fake Sales: “Instead of more regulations, we need informed consumers to vote with their feet.”

If you’re in a store, use a scanner app like Red Laser or Scan Life to scan bar codes and find lower prices. Many retailers are price matching if you can show proof of a cheaper price at a competitor.

Consumer Reports recommends using Groupon and Living Social for their discounts and daily deals. Personally, I prefer the bots over the daily deal sites which seem to always send me offers I will never need, such as half-price deals on a Brazilian Bikini Wax.   Some consumers are reporting that Google Daily Deals is a good resource.

Sales aren’t going anywhere.   After all, the American consumer loves and expects them.  But for discerning and educated consumers who understand the marketplace, information is power.  With all the resources available to accurately find the lowest price, sales aren’t needed to get a good deal.

I welcome your comments on this topic.  Email me at pete at myconsumerteam dot com. Below are links to several sources we consulted for this blog post.

http://www.fool.com/investing/general/2015/07/31/this-retail-trick-might-have-claimed-another-victi.aspx

http://www.consumerreports.org/cro/news/2014/06/don-t-be-taken-in-by-fake-sales/index.htm

http://www.consumerreports.org/cro/retail-stores/buying-guide.htm

http://www.consumerreports.org/cro/news/2014/04/advertising-tactics-that-bug-americans-the-most/index.htm

Editor’s Note:  The Consumer Team with Pete Thomson is broadcast Saturdays from 6-8 PM Central on CBS Radio’s 1080 KRLD in Dallas, Texas.