Fake J.C. Penney prices tricking consumers with markdowns?
J.C. Penney is coming under fire for some sketchy dealings involving the company's pricing of discount items.
In an expose posted by the New York Post, insiders claim that fake J.C. Penney prices are being pushed to try to increase how much money customers are paying. If you've been to J.C. Penney stores, you've likely noticed that some items are marked down significantly from their "original" cost to the new J.C. Penney sale cost. Though Penney CEO Ron Johnson announced in 2012 that he's pushing "fair and square" pricing -- i.e. getting rid of sales and clearances and having normal prices be the equivalent of what they would have been at a discount -- the Post article claims that Johnson is "pushing some manufacturers to concoct phony suggested retail markups for their clothing."
"They want to have a table of sweaters with a sign saying 'regular price, $30,' and the price tag will be $22,'" one source says, describing a hypothetical situation.
The Post describes the "fair and square" pricing model as "disastrous" as Penney shares are down almost 48 percent and says Johnson is trying to recover from that. Some clothing manufacturers say that they never gave Penney suggested "original" retail prices to begin with, and left that job to the company. Now Penney is allegedly asking for manufacturers to confirm suggested retail prices in writing -- but also have them scaled a bit higher.
"Aren't you now going back to fooling the customer the way you said you wouldn't?" one supplier exec says. "Are we now saying, 'Never underestimate the stupidity of the American consumer?'"
The plan here is obvious: By making "original" prices seem higher, J.C. Penney can charge higher "discount" prices while still making consumers feel like they're winning big. Penney officials didn't respond to requests for comment the Post.
Though the fake J.C. Penney prices claims might prove to be false (or just might not be implemented), it is clear that the company is moving away from the "fair and square" pricing model. Business Insider is reporting that on Feb. 1, exactly a year after Johnson implemented the "every day low prices" guarantee, Penney stores will host a sales event seemingly tied into Valentine's Day.
"It's like we're going back to 2011 all over again," a J.C. Penney employee says. "We can say 'clearance' again... just not 'sale' (we say 'event') or 'coupon' (we say 'reward'). Funny how the customer knows this but it seems like no one nowadays knows it in Plano. Then, when they do a coupon or sale and it was a success, they all congratulate everyone on a great idea -- it's not a new concept!"
A Penney exec adds, "It's funny how things come full circle. The customers voted that they want the old JCP back."
Penney spokespeople have not responded to this claim either.