Ways to Save Money

Here’s Proof the “MSRP” Prices at Kohl’s and Macy’s are Total BS

February 19, 2016
by Susan Shain
Senior Writer
pricing strategies

How many times have you been tempted to buy something because it seemed like such a great deal?

You see a sign emblazoned with “70% off!” or a sale for half the “original” price.

Just like that, you’re convinced.

It happens to everyone, especially those of us with the penny-hoarding bone; we want to believe we’re getting a bargain.

But what if those prices aren’t what they seem? What if retailers create them just to elicit those elated emotions — and seal the sale?

Would you be shocked? Angry? Confused?

Feeling all of the above, some fellow shoppers have actually brought lawsuits against popular retailers like T.J. Maxx, JC Penney, Nordstrom Rack, Kohl’s, Macy’s and Burlington Coat Factory.

These consumers say “they were duped into buying goods they wouldn’t have otherwise purchased based on phony discounts,” writes Buzzfeed’s Sapna Maheshwari.

Curious about the allegations, Maheshwari decided to delve further into the complicated world of retail pricing strategies.

Her findings were interesting — as well as a bit surprising — and I wanted to pass on the knowledge to you…

How Retailers Come Up With Their Ridiculous Prices

Thanks to the retailers’ legal defenses, we now have some idea where they get the prices listed as “original” or “regular.”

The only problem?

We’re even more confused.

As Maheshwari writes, the results merely “illustrate how convoluted the notion of a ‘regular price’ has become.”

Here are some examples from popular retailers:

Nordstrom Rack: The “compare at” price means the item was “previously offered for sale at that price either by another retailer (in-store or online), in a Nordstrom store or on a Nordstrom website,” or it has “the same manufacturer and has the same quality as the item that was offered for sale at its ‘compare at’ price.”

Kohl’s: The “regular” or “original” prices refers to “the former or ‘future’ price on any given item,” on that item or a “comparable” one, at Kohl’s… or another retailer.

Ummm, what?!

Macy’s: “‘Regular’ and ‘Original’ prices are offering prices that may not have resulted in actual sales, and some ‘Original’ prices may not have been in effect during the past 90 days.”

Nuts, right?

So what’s a smart Penny Hoarder to do?

Not a whole lot.

Read up on common tricks retailers use, create a budget before heading to the mall, and if you want to learn about a specific retailer’s pricing policies, head to its website.

But in all honesty, I don’t think it has to be that complicated…

As Maheshwari sagely advises: “Pay $40 if you believe a sweater is actually worth $40.”

Your Turn: Do you make purchases based on the “original” price? Do retailers’ practices upset you?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

by Susan Shain
Contributor for The Penny Hoarder

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