JCPenney caught marking up prices, only to lower them

Daniel Howard, marketing professor at SMU's Cox School of Business, talks about recent sightings of retailer JC Penney marking up prices, then lowering them, causing customers to believe they are saving.

by Jonathan Betz

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....

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.”...