COMBINATION refrigerator-freezer. Regularly $449.50. Now only $349.95." Such price-cutting ads, often phony, are among the fastest spreading evils of U.S. merchandising. Once only fly-by-nighters in dingy back streets offered fake bargains. Today, in trying to keep up with the discount houses, even old established merchants resort to price trickery. The problem is so bad that the Federal Trade Commission last month came out with a nine-point "Guides Against Deceptive Pricing," aimed at getting merchants and manufacturers to cooperate to force more honesty back into price advertising. Unless something is done, FTC Chairman John Gwynne told Manhattan's Radio and Television Executives Society, retailers may wake up to find they have "destroyed the confidence of the buying public in all advertising."
While the evil of fake price-cutting has spread into virtually every merchandise field, the FTC and Better Business Bureaus say that the practice is the worst on sales of refrigerators, stoves, television sets, mattresses and other household goods. Chicago's Better Business Bureau recently checked 23 claims of bargains, found in all cases that the presale prices were fictitious. Most of the bargains sold for less or the same in other stores. A $289.95 advertised list TV set, for example, was "on sale" at $249.95 but could be bought elsewhere at $215.
Since customers are becoming increasingly suspicious of a store's cut-price tags, many a merchant and manufacturer have joined up in a new scheme to fool the customer by promoting a "manufacturer's list price." The manufacturer advertises a "suggested retail price," which is much higher than he expects the retailer to charge, tickets his merchandise or stamps the delivery carton with the inflated price. The retailer can then drastically cut the price, show the customer the price stamped on the original carton as proof of a huge bargain. One lawnmower manufacturer advertised last spring in a trade publication that his power mowers, which he priced in ads at $154.95, could be sold at $74.95—and the retailer would make the usual profit. A watchmaker preticketed a lady's wristwatch at $200, a Detroit store sold the watch for $17.00. A blanket manufacturer offered retailers $24.95-list blankets that a retailer sold at $14.95; comparative shopping showed that they were not worth $10.00. One major mattress maker now gives his retailers a choice of three different list prices to be sewn to the ticking. Which preticket the merchant chooses depends on 1) what sales price he plans to ask, 2) how big a reduction he thinks his customers will swallow.