A J.C Penney worker who has spoken out against their fake sales practices is now claiming that the store is now trying to silence him. Former employee Bob Blatchford went to NBC’s Jeff Rossen and explained how the retailer would artificially inflate the prices of certain items immediately before a sale, so that when the item was eventually discounted, it was either exactly the same price as it was before the sale, or in some cases, even more. An example was given of a pair of $7 shorts that suddenly became $14 and were then ‘discounted’ by 50%.
Blatchford told NBC News: “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. Not only was it a fake sale, but they were actually paying more than they would have been previously.” Two days after he appeared on the Today Show the retailer fired him and when he went to claim unemployment benefits, his claim was contested by the store, in his mind to attempt to dissuade him from speaking out further.
However, although the fake sales practice appears to be misleading and could in some cases be illegal, it is nothing new in the retailing industry. There is much documented evidence that supports the notion of shoppers wanting to find a bargain, and being naturally drawn to discounted items.
It is thought that J.C Penney began using fake sale practices after the CEO Ron Johnson stopped customer from keeping coupons in order to get their discounted items and prices. The response was not favorable and sales dropped by a whopping $4.3 billion in 2012. Johnson acknowledged: “Coupons were a drug. They really drove traffic.” The disastrous year led to his dismissal in 2013 but it is believed that the retailer had started using fake practices before then.
An aggressive campaign of mass sales with the return of coupons attempted to lure back the disgruntled customers, but these tactics drew the attention from numerous consumer groups who started investigating the actual sales prices.
The problem with fake sales practices is that the guidelines are not specific, with no time limits set for retailers to follow. The Federal Trade Commission states that if an item in a sale has been offered to the public at an original price “ on a regular basis for a reasonably substantial period of time,” then this is deemed to be a legitimate sales item. However, if the store deliberately increased the original price before the item went on sale, this is considered to be a fake sales item, and the retailer could face court action.
Artificially inflating prices unfortunately is not a new phenomenon within the retail industry, and according to Robin Lewis, co-author of The New Rules of Retail and CEO of retail industry newsletter The Robin Report, retailers are looking for even more tricks of the trade to get the most out of their customers: “The sales seem to be getting deeper. They’re figuring out all kinds of different ways of discounting. Retailers have to fight tooth and nail for a share of the market. The growth is coming from stealing the customer away from a competitor, so the weapon of choice becomes price.”
J.C Penney used to be synonymous with bargains, discounted goods and grabbing the best deals. After the coupons disappeared customers lost faith with the store and simply left to find their bargains elsewhere. Since Blatchford’s disclosure no NBC, the store has retaliated by filing a petition against the former employee with American Arbitration Association. The retailer are stating in their action that Blatchford has revealed company secrets, describing them as “trade secret, proprietary and confidential business information.”
They has also turned the spotlight towards Blatchford, painting him as having a ‘love of media attention’ and an ‘unbalanced vendetta’.
According to Dorothy Crenshaw, CEO and creative director at public relations firm Crenshaw Communications, this is the last thing that J.C Penney wants whilst it is struggling with sales figures: “I’m sure they don’t want people to be talking about it. 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.”
Source: Huffington Post