Discounts Are Kind Of ... a Lie
Most items that are 'on sale' were designed to sell at that price
By Kevin Spak, Newser User
Posted Nov 29, 2013 2:54 PM CST
A shopper looks into the show window during a discount sale at a store in Seoul, South Korea, Friday, July 13, 2012.   (AP Photo/Ahn Young-joon)

(Newser) – If you couldn't bring yourself to rush out and do battle on Black Friday, no need to feel like you missed out: The discounts you'd be seeing if you were at the mall right now are what the Wall Street Journal calls "retail theater." Stores are not actually slashing prices on inventory that otherwise wouldn't sell. Instead they work with suppliers to set artificially high starting prices that will still yield the desired profit once they take, say, 50% off. The "discount" price is, in effect, the real intended price.

Since 2009, both the number of discounts and size of discounts at 31 major retailers have shot up, yet profit margins have remained completely flat. Some stores even increase prices right before the holidays; a Journal analysis showed prices rising an average 8% in the weeks before Thanksgiving last year for about one-fifth of the products analyzed. Customers are mostly rewarding the behavior, although a handful have sued, saying that items weren't offered at their list price "for a reasonably substantial period of time," the vague standard mandated by the FTC. If you want to avoid some of the sneakiest "pricing tricks" retailers use, check out this tip sheet from The Week.

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Showing 3 of 25 comments
HANKHILL
Dec 2, 2013 10:30 AM CST
i told you so! lol
atxferret
Dec 1, 2013 2:17 AM CST
How about "Don't buy it if you can't afford it", no matter the price?
793tango
Nov 30, 2013 5:40 PM CST
And yet the masses still fall for it EVERY year. As Barnum said 'There's a sucker born every day' This way to the Egress.......