I was trying to find some sales figures for Black Friday this year and happened upon this article in the WSJ by Suzanne Kapner. In it, she details how retailers raise prices on their items so that, even with a discount, their profit margins remain the same. She also mentions that JC Penney at one point tried to abandon big sales altogether in favor of "everyday low prices" but it was a flop with customers trained to salivate at 40% off signs.
I used to shop more frequently at the Saks Off Fifth Outlet but rarely found anything worth buying there. The clearance section was always an extra 40% or 50% off any time I went in and one day I saw a silky Vince top on the clearance rack and got excited. It was one I had been eyeing for a while but since it was a white silk pullover, I was hesitant to pay too much for it since I somehow always manage to transfer makeup onto my clothes. And my steering wheel, it's covered in makeup from doing it in the car; in fact I used make up remover wipes to clean it when leather cleaner wasn't doing the trick. But anyway, I saw it and the clearance price on the red sticker was $128.99, and this is the price I would be getting 50% off of. This number seemed vaguely familiar though, so I peeled back the red sticker a big just to see that the earlier price it was covering, the non-clearance price, was $128.99. I gasped in shock and horror (not really) and vowed never to return. Saks was trying to make me think I was getting a really good deal, an item marked down from full price going into the outlet store, then further marked down to clearance, and then 50% off on top of that! It sounds pretty good, and that bright red tag only reinforces that for the shopper. Calling it a "scam" might be a stretch, but it's deceptive and it bothers me that companies can just do that kind of thing, totally misrepresent the price markdowns, and it isn't an issue.
Oh well, at least I learned to always peel back the stickers a litttttle bit.