Question about Business Practices

[undercoverbrother]

I was noticing that a number of car dealerships in Red Deer have the same approach when pricing vehicles. They put on a price of say $27,000 but give a sale discount of $2000. But, the sale seems to go on forever, as these vehicles are always priced the same way.

I have a murky memory of a retailer in Canada getting into trouble for pricing product higher then putting it on sale, thus creating the appearance of a "deal".


Is this type of pricing legal or ethical?

[BlackArcher101]

Don't see what's wrong with it. Ultimately the customer needs to do some research on the real value of it and using a method like this could actually hurt the dealerships sales as the customer sees a higher price than the other guys.

Aren't most "sales" done this way in retail?

What really cheeses me are the lots that don't post prices on vehicles. You have to ask and I'm sure different customers get different prices at that point.

[Regorium]

I would argue that it's not ethical, but it is legal and most importantly, it is extremely effective.

[DoubleF]

I think what is illegal is to mark up an item and then do a discount on it and claim it's a deal. (ie: $25 normal, write up to $26 and say $1 or more off)

If it just so happens to have discounts all the time at full price, that's a different story.

But I'm not sure.

[Bill Bumface]

Sportchek got nailed for this. It's not legal.

http://www.wikidfranchise.org/20040707-forzani-fined

"Under Competition Act policy, the original price must be either the price at which at least 50 per cent of the goods were sold or the price that was offered for at least the preceding six months."

[Regular_John]

I've often wondered about this myself when stores like The Gap seem to perpetually be "30% off!". It seems the "sales" happen 7 days a week, 365 days a year. Literally not giving you the opportunity to pay "full price" on anything.

[troutman]

http://www.ucalgary.ca/biztechlaw/node/203

WHAT LEGISLATION PROTECTS THE CONSUMER FROM MISLEADING ADVERTISING, DECEPTIVE PRICING PRACTICES, AND OTHER FORMS OF CONSUMER ABUSE?

Advertising in any form is highly regulated in Canada. Legislation exists at the federal, provincial and municipal level. In addition, there is a well-developed body of case law.

Federal legislation includes advertising provisions in the Competition Act, the regulation of lotteries, counterfeiting and trading stamps under the Criminal Code, the Food and Drugs Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, the Hazardous Products Act, the Copyright and Trademark Acts and the Broadcast Act.

Many provinces have also introduced "business practice" acts which prohibit the making of false or deceptive representations to consumers. All provinces also have strict disclosure requirements in the advertising of credit. Some provide that claims in advertising have the same effect as if they were product warranties.[6] All provinces also regulate the promotion of alcoholic beverages.

Municipal governments have also entered the fray and many have enacted bylaws regulating the kind and size of outdoor advertising sign. In addition, some municipalities require licences for certain advertised sales, i.e., bankruptcy, fire and other "closing out sales".

Case law also provides some protection. The Law of Libel for example, imposes real limits on comparison advertising. The law of passing off prevents a merchant from deceiving the public as to the origin or manufacturer of goods. Case law has also developed to impose fairness in contest promotions and in skill- testing questions.

Breach of statutory provisions can lead to personal as well as corporate charges, substantial fines and, in some cases, imprisonment. Perhaps the most important piece of legislation in this regard is the Competition Act.

http://www.qp.alberta.ca/1266.cfm?pa...=9780779737963

[troutman]

http://www.competitionbureau.gc.ca/e...eng/02776.html

The false or misleading ordinary selling price provisions of the Competition Act are designed to ensure that when products are promoted at sale prices, consumers are not misled by reference to inflated regular prices.

The Act prohibits false or misleading representations to the public as to the ordinary selling price of a product, in any form whatsoever. Ordinary selling price is validated in one of two ways: either a substantial volume of the product was sold at that price or higher, within a reasonable amount of time (volume test); or the product was offered for sale, in good faith, for a substantial period of time at that price or a higher price (time test).

For more information

[jammies]

The question for me is whether the advertisements are actually showing the MSRP, which is something out of the dealer's control. If I'm selling a car with an MSRP of $26,999 with a $2000 discount, that's not deceptive to advertise, even if I do it 365 days a year.

[Northendzone]

i no longer get hung up on the word "sale". if a product is a price i a willing to pay, then it is fair for all parties - sometimes i am willing to wait to buy something until either i get used tot he price, or it changes to something i am willing to pay, and these days there are very few great deals - the deal will almost always come around again.......

[Rerun]

Sales generally are a bunch of bs. For many items, the sale price IS the regular price, for most of the year.
You're a sucker if you pay full price for a lot of items. Shop around a bit or wait a bit and you will probably find the same item on "sale".

Take for example the Dewalt DW713 10" miter saw. Regular price at Home Depot was $249 (now its $269) but its rare to find it being sold at that price. Its always "on sale".

[Calgary14]

Banana Republic does this. Their regular prices are generally inflated and they offer 30-40% off at least once per week. Not sure if it's illegal but it's funny because the only day they really seem to be busy is when their items are all 40% off (usually every Wednesday).

If you didn't know any different you'd be enticed to buy with their "40% off today only" signs, only to find out later the same thing happens every week