Final sticker price is what matters, says Prof. David Friedman in holiday advertising story

by Sarah Carlson,

  • David Friedman is a business law professor at Willamette Law.
    David Friedman is a business law professor at Willamette Law.

With Thanksgiving and Black Friday just a couple of weeks away, Willamette Law Prof. David Friedman commented in a national MagnifyMoney story this week on holiday advertising.

According to the National Retail Federation, American shoppers are expected to spend as much as $682 billion in November and December this year. That’s up four percent since last year. The story urges customers to be on the lookout for five lies or misleading statements they might hear from retailers.

One lie the Magnify Money story says consumers might hear this season is that “The price is 50 percent off the ‘original price.’” A customer who sees a gift on sale for $400, with an original price of $1,000, likely would experience anchoring bias and give more weight to the original price than the price on the sticker. If the gift was never sold at $1,000, though, Friedman said the customer is being manipulated.

Friedman published research, Reconsidering Fictitious Pricing, in the Minnesota Law Review in 2016. The article addresses whether discounted pricing in stores represents “true discounts” and whether the practice of fictitious pricing harms consumers. The Los Angeles city attorney’s office cited the work in a lawsuit against four major clothing retailers.

“It’s bad for the economy because people are not shopping as long as they normally would,” he said. “The retailer has used false information in an effort to get you to stop shopping right there and make that transaction based on something that’s a false premise. In the aggregate, that means there is resource misallocation.”

The story says other misleading statements customers may hear during the holidays include “We have the lowest prices of the season,” “These deals are only while supplies last,” “You can get an extra 10 percent off when you sign up for a store credit card,” and “We have special deals on name-brand items.” While it’s often difficult to pass up what looks like a good deal, Friedman said what matters is the final sticker price — do the research before buying.

Read the full story here.

About Willamette University College of Law

Opened in 1883, Willamette University College of Law is the first law school in the Pacific Northwest. The college has a long tradition at the forefront of legal education and is committed to the advancement of knowledge through excellent teaching, scholarship and mentorship. Leading faculty, thriving externship and clinical law programs, ample practical skills courses and a proactive career placement office prepare Willamette law students for today's legal job market. According to statistics compiled by the American Bar Association, Willamette ranks first in the Pacific Northwest for job placement for full-time, long-term, JD-preferred/JD-required jobs for the class of 2014 and first in Oregon for the classes of 2012, 2013, 2014, and 2015. Located across the street from the state capitol complex and the Oregon Supreme Court, the college specializes in law and government, law and business, and dispute resolution.

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