Buyer beware: A sale is not always a sale and a bargain isn't always the great deal it appears to be.
Retailers commonly combine slick pricing, frequent couponing and confusing discounting to trick shoppers into believing they are getting big savings. But in reality, shoppers often end up overpaying for items, reported
MarketWatch.
One reason sales and coupons don't mean real savings is because some retailers jack up the original price before offering discounts.
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For example, JC Penney has a reputation for offering coupons. The retailer recently ran a promotion on the Ninja NJ600 Blender claiming the original price was $145.00 but offered it on sale for $99.00.
Meanwhile, at Target, Bed Bath & Beyond and Best Buy, the blender was already listed and selling for $99, says MarketWatch.
Likewise, Kohl's “almost always” has a coupon code available, which makes it seem as if there is almost always a deal to be had.
But Kohl's sells the KitchenAid Artisan Five-Quart Stand Mixer for $449.99, which is typically $100 or more than competitors, reported MarketWatch.
“Consumers would have to have a coupon of $100 off, or 22% off, at Kohl’s to even get the Stand Mixer for the same price as the base price at multiple other stores,” Matthew Ong, a retail analyst at NerdWallet told MarketWatch.
Ong explained that shoppers are usually attracted to the magnitude of the sale — preferring 30% off over 15% off. And retailers are often able to take advantage of that tendency.
Just look at Kohl's. “Even with a great coupon or deal from Kohl’s, the consumer still may not beat out what he or she could have gotten with a smaller value coupon at a different store,” where the stand mixer was already cheaper, notes Ong.
Recently, a
Virginian-Pilot article pointed out that New York & Co. thrives on constant sales and Jos. A. Bank Clothiers rarely opens its doors without pledging to give away a second or third suit for the price of one.
For shoppers, it's thrilling to believe they are getting such deep discounts. But in many cases, the retailers are actually getting what they always intended to get, said Margie Johnson, owner of Shop Talk, a national retail consulting company.
Retailers buy a lot of the so-called sale items with markdowns already in the plan, she told the Virginian-Pilot. The only sale is in customers' minds.
A retailer's primary concern is not really price; it's gross profit margin: the percentage of revenue left over after subtracting the cost of that product – including the manufacturing, shipping, packaging and other work that goes into it, says the Virginian-Pilot.
So why do retailers play mind games?
To drive store traffic, says Greg Smith, the chief creative officer at the VIA Agency, which serves large consumer brands.
And “the places that do this the most, coupon [and offer deals] the most,” he told MarketWatch.
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