Marking Up to Mark Down

Most of us like to believe that we’ve gotten a great deal when we purchase something at 40% to 70% off. The desire to negotiate the "best price" is an almost universal trait of human nature. Sellers take advantage of this by creating the common marketing ploy of perpetual sales.

Consumer protection laws in many states allow a merchant to advertise a sale price for as many as 48 weeks out of the year, requiring items to be displayed at their "regular" price for only 4 weeks annually, usually in no more than 2-4 day increments spaced throughout slower selling periods.

Lesser quality items are often misrepresented and marked at an artificially high price where no sales are expected to occur to allow the merchant to offer extreme discounts year round. Constant advertising claims of "up to ___% off retail" are usually a good indication of this practice. Don’t let your desire for a "deal" override your common sense. Think about it, all businesses have fixed expenses that must be met in addition to the cost of inventory, such as building or rent, payroll, taxes, advertising and utilities. Contrary to advertising claims, no store of any kind can remain in business selling items for less than their cost.

A deal that seems too good to be true probably is. Don’t be taken in by this marketing ploy. When you encounter this practice, consider the "sale" price of the item to be more representative of its actual value.

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