J.C. Penney accused of price manipulation

Source: TheBright.com® NewsTheBright.com® News

J.C. Penney accused of price manipulation

“The CEO of J.C. Penney Ron Johnson is being accused of creating fake prices for items to trick customers into believing they are getting better bargains. Although the department store claims it has fair and clear pricing, recent reports indicate that there is something else happening at stores. Manufacturers are allegedly being told to create phony prices for items, so the stores can claim that there is a greater markdown.

“J.C. Penney is accused of creating fake “original” prices, so the items in their stores can be listed at a lower price and trick customers into believing they are getting a better deal. One popular example that is appearing in multiple sources is sweaters being marked with a fake $30 original price while the reduced sale price is only $22. The actual price of the sweaters may not even be close to $30, yet customers are expected to believe the labels.

“J.C. Penney is using a simple tactic to trick its customers. Higher original prices on labels allow it to make discounts seem more valuable. Some manufacturers claim they never provide original prices to the stores, and leave this up to the management to decide. This would make it easier for J.C. Penney and others to create their own prices.

“CEO Ron Johnson is being blamed for the slow growth of the popular chain and languishing sales last year. It seems that the original plan to promise customers fair and low prices every day is not working. Instead, J.C. Penney seems to be reverting back to its older model by offering sales and simply changing the name to “events” to confuse customers. Clearances are still happening, but the name is different.

“Some manufacturers claim J.C. Penney is trying to force them to provide documentation that shows original prices are higher than normal. This would create a convenient paper trail for the stores as they continue to trick consumers into believing they are getting great discounts. However, most sources claim that customers are not falling for the phony prices. They are able to compare products at other retailers and realize that the original prices on the labels are completely outside the normal range. Still, J.C. Penney does not seem to have any plans to drop this tactic. The stores are expected to post lower than normal sales numbers for the last quarter, and sales are not expected to improve this year.



 

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