Caveat Emptor Macy’s, JCPenney, Sears, Kohls Prices?

Collage of savings discount images

Op-Ed by C J Oakes

Caveat emptor is a concept which has long guided wise consumers. It is Latin for, “Let the Buyer Beware” and has its history in contract law. Starting in the 1950s, used car lots became associated with the term because of the shady practice of inflating prices to give “wiggle room” when negotiating prices. Just last week, retail giants Macy’s, JCPenney, Sears, and Kohls received notice of lawsuits filed by the City of Los Angeles on behalf of consumers for just that practice.

Let the Buyer Beware: False Reference Pricing Ahead

False reference pricing is a form of price anchoring with deception at its core. The idea is simple: Set a price which is higher than desired for an item then put the item on “sale” for the desired price. Unsuspecting consumers are then duped into buying the item under the false assumption that they are getting a deal.

English: Melgarve - Caveat emptor! Warning sig...
English: Melgarve – Caveat emptor! Warning sign at Melgarve bridge (335m)to motorists contemplating the way to Fort Augustus over the Corriyairack Pass (NN4198; 770m) (Photo credit: Wikipedia)

But a bargain, or deal is not being got. Instead, they are getting the same price they would get elsewhere or at times even paying a higher price. This is a deceptive sales practice which is illegal in most states and localities. It is a form of consumer fraud.

Among the most common places where such illegal practices are found are tent sales in parking lots and on the side of the road.

For instance, in Louisiana, a common practice by many Fireworks stands is to advertise “Buy One, Get Two Free.” In reality, the stand is inflating the price of the original fireworks item such that a consumer is paying for three items–not really a deal. Instead of getting variety, the buyer gets more of the same items under the assumption they are getting more for their money. They are not.

What’s the Harm in False Reference Pricing Schemes?

False refefence pricing schemes hurt letigimate businesses. Returning to the Fireworks example, there are many fireworks retailers with seasonal businesses around the nation.

English: JCPenney store at the Holiday Village...
English: JCPenney store at the Holiday Village Mall in Great Falls, Montana, taken March 4, 2007. (Photo credit: Wikipedia)

When deceptive businesses use such practices, it places a strain on those which price fairly. Consumers enter the fairly priced establishment expecting to get the same deal. But they cannot because the legitimate company has priced their merchandise according to their costs.

Consumers rarely compare costs in such instances. If they did, they would find that the costs at the so-called “bargain” locations have inflated prices. What often happens is that on entering a legitimate business and finding there is no “bargain” to be had, they go to the deceptive company and get rooked.

Then, the natural tendency is to paint all such businesses with the same proverbial brush. In later seasons, the consumer is less apt to spend money at either company, the legitimate or the deceptive. So such consumer fraud hurts everyone.

Major Retailers Turning to Unsavory Roadside Sales Tactics for Inspiration?

The deceptive practice of inflating prices in order to dupe consumers into buying more than they otherwise would is not new. After used car dealers began to use the practice, many new car dealers began to do so as well. But with the rise of outlet stores, many of which use such deceptive practices to promote merchandise, major retailers are joining the fray.

English: Macy's Department Store in New York City.
English: Macy’s Department Store in New York City. (Photo credit: Wikipedia)

Thus, what was once an accepted, even winked at business practice is now getting serious looks from law enforcement.

So it is that class action lawsuits are starting to appear around the nation and some prosecutors are seeking punitive injunctions.

The lawsuits against Macy’s, Sears, JCPenney, and Kohls is surely just the start.

Bottom line?

Caveat emptor–let the buyer beware.

If it sounds too good to be true, it likely is too good to be true.

President, Publisher at Oakes Media Group
C J Oakes is an author and freelance writer from Lubbock, TX, USA. In addition to this website, he operates and

As an author, he has numerous books to his credit including the best-selling Survive and Thrive After the Collapse of the Dollar series. In addition, he has written over a hundred books for clients since 2011 and has created innumerable web pages for law firms and others worldwide.

Passionate about Justice, Mr. Oakes believes that the scales of justice are never balanced, but it is the duty of each citizen to do their part to re-calibrate the scales as needed. When the scales of justice shift too far to one side, they must be returned a near as possible to center.

He built this site with the goal of helping students of criminal justice understand how to apply the principles needed for re-calibrating the scales as well as providing easy access to needed study resources.

Criminal Justice Law International welcomes guest posts and anyone interested in contributing to the goals of the site.

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