JCPenney caught marking up prices, only to lower them

JCPenney

Credit: WFAA

Customers at this JCPenney store in Dallas told News 8 they'll keep shopping as long as the price is right.

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by JONATHAN BETZ

WFAA

Posted on June 5, 2013 at 5:48 PM

Updated Wednesday, Jun 5 at 7:57 PM

DALLAS –– After a disastrous rollout of an everyday low pricing model, JCPenney is now facing more controversy as it changes its prices yet again. 

The company is defending its return to coupons and discounts, saying they’re popular with consumers. Yet the Plano-based retailer has been caught putting more expensive price tags on top of cheaper ones. 

“That’s awful,” shopper Sue Jackson said when News 8 showed her a men’s shirt with a $50 sticker hiding a $30 price. “I never thought they would do that, especially after all the trouble they just had.”
 
News 8 found several items in a Dallas store this week with higher tags covering cheaper prices. Recently, WCPO-TV in Cincinnati found the same thing in several stores there.
 
The company changed its pricing structure in February, returning to coupons and sales.
 
“We now understand that customers are motivated by promotions and prefer to receive discounts through sales and coupons applied at checkout,” read a statement from JCPenney. “So we are returning to a promotional pricing model that is commonly used in the industry to give customers the value they are looking for when they shop with us.”
 
The items that News 8 found were all discounted at the cash register, even though they weren’t marked as sale items.  The cashier rang up the shirt with a $50 sticker as costing $29.99, almost the same amount as the original $30 price.
 
Consumers would have thought they saved $20.
 
“What JCPenney has done is terrible,” said SMU marketing professor Daniel Howard, who has studied retailers for years. “They know that one way to increase their sales is to convince people they are getting a deal even when they are not.”
 
The company has been working to win back customers after losses of more than $1 billion last year. 
 
Howard strongly objects to JCPenney’s recent price change.
 
“You are deceiving consumers,” Howard said. “What JCPenney did is wrong, but on the other hand, they are not the only ones that are doing it, but they did get caught!”
 

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