It seems like department stores will do anything to get more purchases, but recently several California stores have taken the cake with downright fraud. Everyone loves a sale, and the department stores know that. There’s nothing like the feeling of getting a beautiful blouse or a useful appliance for more than 10% off the listing price, but what if it’s not actually a deal? A recent fad in false advertising has revealed that several popular department store chains have begun faking sales. They put out the signs, set up sales racks, and open their doors but here’s the secret: nothing has actually been marked down. This is their little trick to use your happy ‘getting a bargain’ feeling without actually giving you a bargain. Instead, they lie with false advertising, misrepresenting the original price rather than reducing what they’ll charge you.
If you live or shop in LA, watch out for JCPenney, Kohl’s, Sears, and Macy’s. Yes, we know that’s basically the entire shopping mall, but they’re all caught in this astounding deception. What they’re doing is known as “false reference pricing” and to implement it, all the stores have to do is a little backward math. An item on sale will sell faster than non-sale items, but of course, they make less money for the company. To remedy this, fraudulent stores offer a fake 30% discount on an item they claim is worth 30% more than the original selling price without reducing the actual cost by a single cent. This way, they get to manipulate customer enthusiasm while hiding the fact that their items at un-faked retail prices weren’t selling well enough. The joke being that they definitely could not have sold the items at the false original prices.
What they’re counting on is that customers aren’t in the store every day and won’t notice that the prices haven’t changed. These stores are sure that because you aren’t the one folding and labeling their items, there’s no way to know what the original sale price was. What they didn’t expect was diligent bargain hunters and cross-store comparisons. One of their major mistakes was online listings. The inconsistencies with national sales portals and store prices revealed the deceit for Kohl’s, while Sears was found guilty of changing online prices as well as in-store tags.
For a real life example of this trickery, Kohls had a pair of belted cargo shorts on “sale” for $35.99 in January 2016. Their stickers and price tags proclaimed that this an amazing discount from the original price of $60. However, when the investigators looked into the store’s sales records, they found that the shorts had only ever sold for the “sale” price of $35.99. This isn’t the first time Kohl’s or JCPenney’s has been caught and the other stores are just as guilty. Macy’s is selling a $30 pendant they claim is worth $120 but has only ever sold for $30, and JCPenney actually offered real discounts but at fake bargain percentages from a fake original price. Sears has been found to continually claim that a $999.99 Kenmore washing machine’s original listing price is $1,179 while offering it on “sale” at its true price and a real discount price of $649 throughout the deception.
The city of Los Angeles has joined the existing Class Action suits against the offending department stores and is seeking serious retribution. The goal is to ensure that false reference pricing is permanently prohibited and establish a civil penalty fine for every violation. The proposed fine will be $2,500 for every misrepresented item, which is a hefty cost for a few fake dollars. Hopefully, we’ll see a short and sharp end to this despicable display of false advertising that will successfully prevent future transgressions by these retail monoliths.
If you or someone you know has been the victim of fraud, false advertising, or other mistreatment by a large company, you may not be the only one. Aiman-Smith & Marcy is a local California law office that specializes in employment law, consumer fraud, and class action law suits. Just because you’re the ‘little guy’ in a fraud scenario doesn’t mean you have to face the big companies alone. Contact our offices today for more information or compassionate, professional advice.