Are you really getting a great deal when a major retailer slashes its prices?
That $10 shirt you bought for half off at J.C. Penney may not be the bargain you thought it was.
Bob Blatchford, who worked at a Penney’s in Florida, alleges that the department store was boosting the original prices of items and then marking the prices down, misleading customers into thinking they were receiving huge discounts.
Blatchford told Today:
“I saw a lot of pricing teams going through the store, raising the prices, mostly doubling — towels and clothing. Then they would go on sale, and they wouldn’t always go on sale for 50 percent off,” Blatchford said.
“So it was — not only was it a fake sale, but they were actually paying more than they would have been previously.”
Blatchford claims he was fired two days after the story first aired. And when he filed for unemployment benefits, Penney contested his claim, Blatchford told The Huffington Post. Now he says Penney has filed an arbitration petition, demanding that Blatchford return any company documents he may have in his possession.
HuffPo said Penney “characterized Blatchford’s revelations on NBC that the company drastically hiked prices and then slashed them in order to tout a ‘sale’ as ‘trade secret, proprietary and confidential business information.'”
Is this type of retail pricing strategy a surprise to shoppers? Maybe not. HuffPo says:
The fight between Blatchford and J.C. Penney belies an open retail secret: Discounts, sale prices and big promotions are largely a game of smoke and mirrors. But until J.C. Penney ousted its CEO last year and his successor reinstated old pricing strategies, it was a largely unconfirmed open secret.
J.C. Penney Co. fired CEO Ron Johnson about a year ago after a devastating attempt by Johnson to change the retailer’s sales strategy by getting rid of all sales and coupons. As a result, sales nosedived by $4.3 billion in just one year.
After ousting Johnson, Penney reinstated former CEO Mike Ullman, as well as its tried-and-true sales and coupon strategy. But some customers and people like Blatchford are now questioning the retailer’s pricing tactics.
Dorothy Crenshaw, CEO of Crenshaw Communications, was quoted by HuffPo:
“I’m sure they don’t want people to be talking about it,” Crenshaw said. “It is very likely how many stores operate, but this is much more of a drumbeat around a particular store, at a time that they least need it. They’d love for this whole thing to go away.”
Things may be looking up for the 112-year-old retailer. Penney said it’s now on track for its first profitable quarter since early 2011, USA Today said.
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