April 27, 2016
Are these deep discounts advertised really bargains?
Dear Consumer Ed:
I am shopping for a new refrigerator, and many of the ads I read say 50% to 90% off. It seems like everyone has the same deep discounts. What’s going on?
Consumer Ed says:
Oftentimes, a retail seller will induce a buyer to purchase one of its products by comparing that product’s advertised sale price with some prior or existing reference price in a way that leads the buyer to believe that by purchasing from that specific seller he or she is saving the difference between the reference price and the advertised sale price. Consequently, so-called “comparative pricing” can be a powerful advertising tool, and when coupled with the seller’s own incentives to maximize sales (and the prospective buyer’s desire to obtain a bargain), it may provide the seller with power to take advantage of consumers.
In response to these concerns, federal and state legislators have enacted deceptive pricing statutes that essentially prohibit sellers from advertising their products’ prices in ways that may mislead a buyer. Generally speaking, it is deceptive for a seller to compare sale prices with some other reference price unless the seller can somehow show that the reference price is bona fide. If, in fact, the reference price is the actual, bona fide price at which the article was offered to the public on a regular basis for a substantial period of time, this provides a legitimate basis for the advertising of a price comparison, and the item being advertised is a true bargain.
The advertised sales you are seeing regarding refrigerators may well be legitimate, but be cautious when you see sales with such deep discounts. The best thing you can do to protect yourself from phony bargains is to do your own price comparing. See what other retailers are charging for the same product, and thereby determine if the store is really offering you a great deal or not.
Again, both federal and state laws prohibit retail companies from advertising discounts if the discounts are not legitimate. If you believe that a particular store is deceptively offering discounts, please make a complaint to theGeorgia Attorney General's Consumer Protection Division by calling 404-651-8600.