If you enjoy going to outlet stores to find steep discounts on your favorite brands, how do you know if you are truly receiving a discount? Unfortunately, many outlet stores offer deceptive “discounts” in order to lure in their customers.
In one case at a Bass Outlet store, a customer purchased a pair of boots that were “on sale” for $45 with the “original” price being $180. However, the $180 price never existed. That customer is now the lead plaintiff in a lawsuit seeking class-action status over false discounts at outlet stores.
A Growing Trend
These phantom discounts are proving to be a trend among many outlet stores and are designed to trick customers into thinking they are receiving a great deal, a psychological effect known as “framing.” There are laws prohibiting deceptive and misleading advertising, which is why courts and regulators are scrutinizing these practices and customers should as well.
Retailers that falsely convey that goods are worth more than they are being sold for cause the market economy to not work right due to these distorted prices. Price tags are disappearing similarly to those of cable television or car repairs, making comparison shopping impossible for customers. Also, the businesses that are misleading customers are flourishing, while those that offer better products at fair prices are suffering or failing.
Less Quality, Too
Another trend being recognized is sellers making separate and cheaper lines of clothing that are only being sold in outlet stores due to their growing popularity. If this is made clear to customers, it is fair game. However, if it is not made clear, customers are being tricked into believing they are purchasing items that are of equal value to those sold in standard retail stores. As a result, customers cannot make correct comparisons when making decisions about purchasing items, a perspective that courts and regulators agree with.
What’s Being Done
Members of Congress asked the Federal Trade Commission to investigate these practices in 2014 in which those members stated that 85% of merchandise sold in outlet stores was misleading merchandise that was made specifically for the outlet store.
Customers should be cautious as to whether or not they are actually receiving a discount and should ask the following questions:
- Are the items specifically manufactured for the outlet store?
- Is the item sold in other stores?
- What is the basis on which the comparison price is being made?
Don’t be fooled by false advertising put forth by outlet stores. Do some research and get the brands you desire at fair prices.