Everybody loves a bargain — so much so, we might be blinded into thinking we’re saving more money than is actually the case.
As Canadians gear up for what some retailers promise will be Boxing Day blowouts, CBC News examined a variety of offers — liquidations, mattress deals, so-called deep discounts — to explore some of the ways a sale might not really be a sale.
Are liquidation sales a deal?
Some bargain shoppers are convinced liquidation sales aren’t the real deal after they peeled back sticker prices at recent Sears sales and discovered cheaper prices hidden underneath.
Canada’s Competition Bureau is now investigating the matter.
Sears Canada has denied any wrongdoing and says any price hikes were actually seasonal price changes made long before liquidation sales began.
But even if everything is done by the book, a liquidation sale might still let customers down. Retail consultant Doug Stephens says that’s because third-party liquidators hold the event, so previous deals offered by the retailer may no longer apply.
“Unfortunately, this is why consumers are often disappointed when they descend upon these liquidations,” says Stephens, with Retail Prophet in Toronto.
“They’re sort of expecting that whatever [the retailer] might have been selling the product for prior to liquidation, they can expect a huge discount off that.”
Steve Bellamy, of Kitchener, Ont., wasn’t impressed by the discounts offered at a Sears liquidation sale in October.
He complained on Facebook that right before the sales started, Sears was selling pots and pans at a 40 to 70 per cent reduction.
But when he returned for the liquidation sale two days later, anticipating an even better deal, he discovered that the same items were only discounted by 20 per cent.
“It’s even a scam nowadays when a store goes out of business,” Bellamy said in his post.
Sears Canada told CBC News that its original deal ended one day before the liquidation sale began, and that liquidation discounts are applied to an item’s original selling price.
‘Compare at’ quandary
Shoppers may be enticed into buying a product when it’s priced at a discount compared to a higher “regular” retail price also indicated on the price tag.
But New York-based bargain-hunter and author Mark Ellwood warns people not to confuse a “compare at” price with a sale price.
“They are simply what that store thinks this is worth according to their estimate. It doesn’t mean they ever sold it at that price,” says Ellwood.
“People have to be very aware of the phrasing on those price tags.”
Questions have been raised about the accuracy of some “compare at” prices.
In 2016, CBC News’ Marketplace bought a number of products from Winners, which is well known for including “compare at” prices on its tags. In many cases, Marketplace couldn’t find the items at other Canadian stores online for the higher “compare at” price listed on the products.
Winners told Marketplace that its “compare at” prices are accurate and fair, but says its stores receive thousands of items each week and sometimes errors can occur.
Amazon recently agreed to pay $1.1 million in fines following a Competition Bureau investigation involving price comparisons on its Canadian website from May 2014 to May 2016.
The bureau said Amazon often compared product prices to a “list” price, “signalling attractive savings for consumers.” However, the bureau determined that the online retailer never verified whether those list prices, provided by suppliers, were accurate.
Is that really a discount?
Along with a “compare at” price, shoppers should be on guard when scoping out sales advertising deep discounts.
According to Canada’s Competition Act, when an item is advertised as being discounted, the retailer must have first “validated” the regular price. Often this is done by selling the product at the original price for a substantial amount of time.
In 2015, craft retail chain Michaels paid a $3.5-million penalty following a Competition Bureau investigation concerning sale claims on picture frames.
The investigation looked at the period from January 2011 to December 2014, and concluded that Michaels didn’t ensure the frames were sold “in good faith prior to promoting them at substantial discounts.”
Following another investigation, the bureau alleged that Hudson’s Bay Company misled the public about the regular selling price of mattresses when they were advertised at deep discounts between March 2013 and January 2015.
Hudson’s Bay denies the allegation. The case is now before the Competition Tribunal.
Ellwood is not familiar with the HBC case but claims mattress sales can be suspect. “My rules with mattresses is don’t trust anything,” he said.
He says that may have to do with the fact that people buy few mattresses in their lives, so they don’t keep tabs on what the item should regularly cost.
“If the supermarket changes the price on a pint of milk, everyone notices it straight away,” he said. “If you have long-purchase-cycle items, people are more vulnerable to being hoodwinked.”
To avoid pitfalls, Ellwood recommends shoppers ask themselves whether, if a product’s sale price was presented as the regular price with no discount, they would still think it was a deal.
‘You should always cover up the higher price and say to yourself, ‘Would I have paid this [sale price] if it was the original price?'”