Dive Brief:
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When he was CEO of J.C. Penney, Ron Johnson tried to do away with “price anchoring” — listing discounts over prices that were never really charged for certain items — but the practice was brought back after Johnson’s “always good prices” approach was deemed a failure.
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But regulators and courts don’t like it when retailers take the practice too far, because they consider it deceptive. A current class action lawsuit against J.C. Penney could have a major impact on retailers across the board.
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State attorneys have similarly cracked down on the practice of listing “price comparisons” that don’t accurately reflect price differences between one retailer and another.
Dive Insight:
Shoppers love a bargain, and to some extent consumers and retailers alike know that the “original price” and sale price comparison is a bit of a game. But that can be taken too far, and many have said that J.C. Penney overdoes it.
A high-profile loss in court over the practice could bring J.C. Penney right back to where it was when Ron Johnson tried to rein in prices that weren't above board. And it could have implications for outlet stores and other retailers that similarly overplay their hand when it comes to price anchoring.
