J.C. Penney Denies Tricking Customers With Phony 'Suggested' Prices

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JCPThe centerpiece of CEO Ron Johnson's makeover of J.C. Penney (JCP) has been the idea of "fair and square pricing" -- eschewing discounts, coupons and other promotions in favor of everyday low prices. But a new report suggests that the company's pricing isn't as fair and square as it might appear.

James Covert wrote in the New York Post Thursday morning that Johnson is pushing vendors to make up suggested retail prices for their clothing so that its own prices seem even lower by comparison.

The Post's sources emphasized that the retailer isn't asking manufacturers to artificially inflate their sticker prices -- a practice Johnson himself once condemned. Rather, the sources say that J.C. Penney is asking manufacturers to invent suggested prices where none previously existed, even asking them to put those suggested prices in writing.

If true, it becomes the latest point in a pattern, the outline of which suggests that the floundering retailer is moving away from its revolutionary new pricing strategy in the face of falling sales and fleeing customers. In October, Penny's blasted out a $10 coupon to email subscribers, but insisted it was a "gift," not a coupon. Then over the holidays, it got in on Black Friday with what it called its "only sale of the year" -- which was followed not so many weeks later by an end-of-year clearance sale.

In an emailed statement to DailyFinance, company officials acknowledged a new effort to display MSRPs on select brands, but denied fabricating suggested prices. Here is the statement in full:


"We began showing the MSRP last fall on national brands including Izod, Alfred Dunner and Levi's to illustrate how jcpenney's low every day prices compared to the manufacturer's suggested price. Customers appreciated having a reference price so they can better understand the value we offer. Because it successfully resonated with customers, jcpenney plans to expand this effort by showing the MSRP comparison on additional national branded items -- which was previously shared during our Q3 earnings presentation last November.

"As is common across the retail industry, national suppliers determine the MSRP. We would never insist that our suppliers falsify their MSRP to create the illusion of value. We remain committed to delivering value to our customers with integrity."


Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.




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myadreplies

ALL companies price this way....and I mean ALL companies, especially retail companies!!!

This is NOTHING new, it has been going on for DECADES!!

THIS IS STANDARD BUSINESS PRACTICE!!!

It is especially true of "discount" retailers between November and the end of December.
Retailers like WalMart will hike up prices around August through November at least 50% or MORE......then around "Black Friday" they will "discount" items heavily, so you think you are getting a good deal, when in fact, you are paying FULL standard retail price!!

I have been in retail for many years, and this has been going on since retail business began.

THEY MARK IT UP, TO PUT IT ON SALE, AND STILL GET THE FULL RETAIL PRICE FOR IT!.

The ONLY TRUE discounts you get is from the clearance sections after a season is over with. Out of date or out of season items will be sold at a real discount, in order to get them out of stock and off the floor, so regular priced stock can be placed out on the floor.

March 19 2014 at 1:30 PM Report abuse rate up rate down Reply
dpratherlcq

FIRED ALL GOOD STAFF WHO CARED ABOUT THE COMPANY WITH PRODUCT KNOWLEDGE NOT A SMART IDEA. MANAGERS HIRING NEW STAFF AND NOT TRAINING THEM THE JCP WAY HOW STUPID IS THAT NOT VERY SMART. IT WILL COME BACK TO BITE YOU.. HOPE YOU REALLY GET TO KNOW YOUR MANAGERS AND WHAT THEY ARE REALLY ABOUT...DUMMYS....IS WHAT THEY ARE A BUNCH OF BACK STABBERS...
FIRED ALL GOOD STAFF WHO CARED ABOUT THE COMPANY WITH PRODUCT KNOWLEDGE NOT A SMART IDEA. MANAGERS HIRING NEW STAFF AND NOT TRAINING THEM THE JCP WAY HOW STUPID IS THAT NOT VERY SMART. IT WILL COME BACK TO BITE YOU.. HOPE YOU REALLY GET TO KNOW YOUR MANAGERS AND WHAT THEY ARE REALLY ABOUT...DUMMYS....IS WHAT THEY ARE A BUNCH OF BACK STABBERS...

February 28 2013 at 10:59 AM Report abuse rate up rate down Reply
mrsjv1

I am 65 years old and have had a JCP credit card since I was 15 years old. Never late and even sometimes paid my bill in full.. I always liked their curtains and linens. After being a good customer for all of these years and now retired I find that not only is their merchandise CRAP but I recently received a letter from them saying since I am retired and my credit score is no longer 800, They were closing my 50 year old credit card. Well you all know what they can do with their credit card!

January 28 2013 at 10:34 AM Report abuse rate up rate down Reply
donovansdanes

Retailers JCP, Kohls and CPS have always jacked up the suggested MSRP prices on their merchandise in order to make customers think their getting a fantastic deal on a sale priced merchandise.

What these retailers don't seem to realize is that most consumers are well aware of what a fair MSRP price is to begin with.

January 28 2013 at 7:47 AM Report abuse rate up rate down Reply
Kathy FlorCruz

Once again we see the result of blind greed in business. Honesty is gone, integrity is gone. It's ALL about how much MORE businesses, no matter how huge or successful they get, can clear in profit. It is a disgusting & accepted way of business to screw any competitor as much as possible -to the point of driving them out of business being the ideal. Of course-employees are always expendable-especially if they stick with the job long enough to earn enough to live comfortably-they are often fired & replaced with a much younger, lesser paid employee. And quality of goods? Great-if you love everything CHINA. Sad, VERY sad.

January 28 2013 at 1:01 AM Report abuse rate up rate down Reply
ladkraemer

Just like Auto manufacturers have to put their suggested retail prices on Items, so should all manufacturers. This way people know what the real % off is. Every industry should have to post their actual prices so you can compair.
There are industries that say they are lower but the question is, lower than what?

January 27 2013 at 8:40 PM Report abuse rate up rate down Reply
mnkydk

Kohls and Boscovs does the exact same thing.

January 27 2013 at 8:23 PM Report abuse +1 rate up rate down Reply
Hi Kathi

JC Penney is a joke. I can go into Sears and buy Lee jeans at a much lower price than Penney's offers at its "lower prices" Every time I go to Penney's and compare prices, I can get the item I want elsewhere at a lower price. Soon I won't even bother going to compare. Its sad! I used to go often....

January 27 2013 at 8:14 PM Report abuse -1 rate up rate down Reply
walklady

It's time for JCPenney to close up --- it sucks ever since they changed! I used to be an avid JCP shopper, but now, I can't stand to set foot in there!

January 27 2013 at 7:59 PM Report abuse rate up rate down Reply
lisawehlerstudio

Since when do manufactures of every kind NOT have a sudgested retail price that is higher than the stores' price. JCP is not the first one to do this, so do not blame them. If JCP had something to buy that people actualy want we would all be there shopping.

January 27 2013 at 7:24 PM Report abuse +2 rate up rate down Reply