My wife and I went into Macy’s a few weeks ago to find a pair of dress shoes. We expected the sales price to be a real sales price.
We found shoes that were normally $85 were “on sale for $85,” while the regular on the tag was listed at “$120.” We had never seen those shoes for sale anywhere for $120.
My wife commented during that shopping excursion that most of the “sales prices” among 20 stores we visited were actually the regular price.
For this very reason, Los Angeles City Attorney Mike Feuer has just filed suit against JC Penney, Kohl’s, Macy’s and Sears for fraud. These retailers are alleged to list false “regular prices” next to “sales prices” which are actually the normal prices and not a discount at all.
Feuer’s lawsuit will likely succeed and result in millions in sanctions against these retailers for their intentional deception of the public. Feuer’s actions are also seen as a message to other retailers to cease deceptive practices.
But apparently these and other retailers accept paying a few million in penalties occasionally if it provides a platform to gouge the public en masse.
In 2015, JC Penney paid $50 million as a result of a similar lawsuit. Sears and Macy’s paid Federal Trade Commission fines for knowing products were mislabeled.
Just in August this year, Kohl’s agreed to pay $6.15 million for overstating “regular prices.”
For those of you who watch TV/cable, I am sure you are bombarded with car ads. Automakers touting a “Winter Sales Event,” “Season Sales Event,” “Holiday Sales Event,” or “End of the Year Sales Event” are all claiming “hurry, sale ends soon.”
Similar car ads stream all year long promoting stupid “events,” all of which “end soon.”
So when is a car at full price? The Federal Trade Commission defines a sale as at least 10 percent less than the price of the item over three consecutive months prior. This means there must be a three-month hiatus between automaker sales before a sale can be legally and legitimately promoted.
I don’t think any of us remembers an automaker going three months without a sales promotion. Of course, until a fraud suit is filed, this practice will continue.
My point is that it is common practice for retailers to mislead the public in the interest of selling product.
When enforced, apparently the penalties and public embarrassment are not enough to fully dissuade some businesses from their continued deception, but there seems some level of restraint by enterprise in fear of enforcement.
This truth about the “American Way” might be uncomfortable, but deception is typical. Either government does not have the political will or the intent to create a perfectly ethical environment for consumers. But some enforcement is better than none and seems to keeps the most egregious fraud at bay.
Mindful that there is modest enforcement now, what if retailers learn that most federal consumer protections are lifted?
Trump vows to promote business. Cutting taxes for the wealthy and corporations and removing regulations and business restrictions are among the president-elect’s stated goals.
Trump’s cabinet nominees to the head the EPA and Health, Education, and Welfare are people known to heavily criticize these agencies.
It seems Trump’s plan is to defang and disempower government oversight by appointing those to head agencies who oppose the very nature of the protection their bureaus are chartered to defend.
This policy could endanger Wall Street restrictions just enacted in 2010 to remedy the causes of the Great Recession. Just like President George W. Bush, Trump is fostering big financial gains for the ultra wealthy and is creating economic calamity for the middle class.
The hard work that some local agencies are doing, like Feuer’s, to defend the consumer will become a rarity when the federal government leads us away from consumer protection and upends honesty in advertising.
Our newly sound economic platform, the result of eight years of the Obama administration, is but a few years from collapse again. Another Wall Street and housing market calamity is being orchestrated.
I fear that in an America that somewhat defends consumer rights and honest advertising, removal of federal protections puts us all at great risk.
We can build a wall to keep out migrant workers, but what about a wall of safety around consumers and the public?
Economic stability created by fairness in a regulatory climate is the true greatness we need to protect.
Jonathan Kraut directs private investigations and private security firms, is a published author, Democratic Party activist, and SCV Interfaith Council member. His column reflects his own views and not necessarily those of The Signal. or of other organizations.