The quest for ever-deeper Black Friday and Cyber Monday discounts has forced retail businesses to blindly pursue each other further and further into a forbidden forest of deceptive practices.
According to the Wall Street Journal, some big retailers conceal their malfeasance (even, perhaps, from themselves) by strong-arming their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want — but still give consumers the impression of a blowout sale. The problem is that fake holiday discounts and deals constitute deceptive business practices.
Here are three legally suspect deceptive discount schemes:
- Promising something you can’t really offer. Most states prohibit businesses from advertising an offer or product with no intention of honoring the offer or selling the product at that price. Groupon was recently sued for bait-and-switch advertising.
- Marking it up so it can be marked down. It may be a way to get consumers to think they’re getting a great deal, but such practices — including exaggerated former price and competitor price comparisons — can constitute deceptive pricing, according to the Federal Trade Commission.
- Offering bogus “BOGO” deals. “Buy one, get the second one free” deals are clever traps to get consumers to buy an extra item. “BOGO” deals, however, need proper disclosures. It must be clear that it’s a true “buy-one-get-one” or “BOGO” sale or if each item is actually 50 percent off.
Though the temptation may be strong, small business owners should resist the urge to offer shady “fake” deals and discounts. If you have questions, or if you feel you’ve been ripped off, seek advice of a lawyer.
