New Year Sales Are Not What They Seem

The Sun Newspaper carried an article today entitled 'Bye buy to a bargain'.

It describes "a string of sneaky pricing tips aimed at luring shoppers into thinking offers are better than they really are". They include examples such as:

• retailers inflating prices of the ''bargains' for as little as a week before reducing them again for the sale
• using a pre-sale price that was last used nearly a year previously
• using a pre-sale price that was only available at a small number of stores in the chain

A report published by the Office of Fair Trading last year said "Evidence shows that a reference price is very effective at encouraging consumers to make a purchase they may not otherwise have made by increasing consumers' perceptions of the value of the product and the inferred saving. As a result, where the reference price is misleading and consumers are not able to easily identify or verify the reference price - and thereby verify the saving - there is considerable scope for consumer harm."

The article clarifies that the retailers aren't breaking any laws but are making use of loopholes - for example by printing the dates that the items were on sale at the higher price in small print.

You might think that the retailers concerned would be at the 'shadier' end of the scale or perhaps recent well publicised examples of retailers struggling tyo avoid administration. Not so - those named include Sainsbury's, Comet, Argos, Tesco, JD Sports, Boots, Curry's, PC World and Smyths Toys.

It's something I've noticed previously too, particularly at Curry's and PC World but I was surprised at just how common it is.

It's a great example of a policy developed at the expense of the customer, and extreme short term thinking. The objective is to increase the short term volume of sales - during the period of the sale. Do they assume customers won't find out? But what if they do, have they considered the damage to the long term relationship?