I am not much of a shopper, but when JC Penney announced a one low price model I was intrigued. I started to enjoy shopping at JCP because I knew that, unlike at the majority of other similar stores, I would get the best price (not including clearance pricing) on that item possible no matter when I made my purchase.
Never would I make a purchase and then discover the next day that it went on sale for 40% off *cough*Kohl’s*cough*. Never would I feel pressured to make a purchase because there is a chance it’s at its lowest-ever price. Never would I have to feel annoyed at the mind games they play with shoppers with coupons, sales, doorbusters, and the like.
Unfortunately, it would seem that most American consumers like to have the wool pulled over their eyes. They prefer to feel like they are getting a good deal over actually getting a good deal. The most recent evidence of this is JCP’s rational pricing disaster. Long time customers expressed anger that they no longer got special slips of paper to carry in to the store to get “low” prices. Scandal!
JCP fired Ron Johnson, the person behind the one low price model, and has returned to inflating prices so they can make it look as if they’re charging you less (when really they are charging more – got that?).
Maybe the advertising strategy failed to reach the right people, or maybe too many American consumers like being tricked into paying more while feeling like they’re paying less. Regardless of the why, I’d like to show you the what. You may not realize this, but by demanding the situation of price discrimination and fluctuation that comes with sales and coupons, JCP shoppers effectively raised the price they will pay.
Case in point: American Living dress.
I needed a dress for a wedding. I saw an American Living dress that I liked, and purchased two in two colors. One is the clearance version – from last season and in blue. The other is the full priced version – this season and eggplant/purple although a blue was available. The dresses are nearly identical.
I’m showing you the blue dress for contrast, but the eggplant dress illustrates the pay-more-while-pretending-we-pay-less phenomenon all on its own thanks to a handy little thing called a sticker.
Original Price: $55 Clearance Price: $26.99
Original Price: See photos below. Bought on sale at price: $59.99
This is a photo of the eggplant dress price tag.
If you look closely, though, that $80 is a sticker. So what’s underneath?
Cross out with black marker all you want, JCP, we can see what’s going on with a little brightness and contrast adjustment on the photo. That’s an $80 price sticker on top of a $55 MSRP.
Want to see the blue dress sticker? No tricks and games here:
Okay, so what did I pay for that eggplant dress?
I paid $59.99 during a 25% off sale. I paid more for that eggplant dress than the $55 MSRP. That’s what coupons and sales do. Stores can’t count on a set amount of revenue from the items they sell, so they end up charging you more. By refusing to bask in the luxury of knowing the price of an item, JCP shoppers complained their way into higher prices.
Yes, this is one example, and yes, I haven’t proven statistically that this is what happens. I admit those weaknesses, but do you really doubt the truth of what I’m saying? The only way a place like Kohl’s can offer the same shirt for a range of prices between $6 and $12 is if their “sale” price is actually close to where they want their profit margin to sit.
If you’re wondering, I plan on returning the eggplant dress (keeping the blue) and closing my JCP account.
In case you want to see the dresses: