In December of 2016, Los Angeles prosecutors announced that they were suing four national retailers for deceptive pricing practices.
The suit alleged that customers had been fooled by these retailers (Kohl’s, Macy’s, J.C. Penney, and Sears) into believing that the discounts they had received were larger than they actually were. In a public statement, Los Angeles City Attorney, Mike Feuer said, “Customers have the right to be told the truth about the prices they are paying, and to know if a bargain is really a bargain.” This event points to a very real, and growing risk for retailers: that their promotional practices may be leaving them open to legal action.
Retail promotions are conceived of and executed by merchants and marketers who are largely unfamiliar with the laws and guidelines that apply to advertisements and discounts. They often follow pricing strategies and practices that were established long ago and may have evolved due to competitive pressures, causing these strategies to drift into legal gray area.