How to spot a fake "was" price

What a "was" price is supposed to mean

A crossed-out price beside a sale price is a claim: this item used to cost more here. The FTC's Guides Against Deceptive Pricing, in 16 CFR Part 233, describe when that claim is fair and when it isn't.

Under section 233.1, a former price is genuine when the seller openly and actively offered the item at that price, in good faith, for a reasonably substantial period, in the recent regular course of business. The seller doesn't have to have sold any at that price. But it shouldn't suggest the old price was a selling price unless it made real sales at it.

How a "was" price goes wrong

The guides describe the common ways a former price becomes fictitious:

• The price was raised for a short time so a later cut looks large. The guides' own example: pens that normally sell for $7.50 are marked up to $10 briefly, then advertised as "Were $10, Now Only $7.50".
• The price was never actually offered to shoppers.
• The price was used only in the distant past, and the ad doesn't say so.
• The price wasn't kept long enough before the reduction.
• The cut is too small to matter. When an ad just says "Sale" or "Reduced" without numbers, the drop still has to be big enough that a shopper like you would see a real saving. A $10 item "reduced" to $9.99 fails.

"Compare at", "value" and list prices

Not every reference price is the store's own old price. Section 233.2 covers comparisons with other sellers. A higher "price elsewhere" should reflect what the main local stores actually charge. A "retail value" that only a few small shops charge is misleading when the main local stores sell for much less. If an ad compares with a "comparable" item, that item has to be of similar quality and reasonably easy for you to find.

Section 233.3 covers list prices and manufacturers' suggested retail prices. The guides note that shoppers often read a list price as the usual price, so a discount from it misleads when few sales happen near it. If the list price is well above the highest price at which substantial sales happen in the area, they call advertising a cut from it deceptive. Manufacturers also shouldn't supply inflated price tags that help stores advertise fake reductions.

Checks you can run

1. Write down the exact item: the manufacturer or model number, size and color, as the FTC suggests. Then look up that same model at two or three other big stores. If most sell it near the "sale" price, the crossed-out price isn't the going rate.
2. Read the label. "Was" or "regular" points to this store's own past price. "Compare at", "value" or "list" usually points somewhere else, so ask what it's compared with.
3. Notice how often the item's "on sale". The guides expect a former price to have been offered for a reasonably substantial period. If an item's always marked down, it probably wasn't selling at the higher price for long.
4. Look at the size of the cut in dollars, not just the percent badge.
5. Check outlet goods. The FTC notes that many stores sell items made only for their outlets, and these may be of lower quality than what regular stores sell. So a regular store's price may not be a fair comparison for them.
6. Add up the total cost. The FTC says to count shipping, handling, delivery, taxes and other fees. It also says to read the deal's terms, such as whether you must buy something else to get the price.
7. Check the return policy. The FTC notes that sellers often have different refund and return rules for sale items, especially clearance, and that some sellers will match a competitor's price.

Comparison sites and outlet tags

Price comparison sites help with the first check. But the FTC warns that some are set up by manufacturers to promote their own products, and some list or rank only sellers that pay. Stick to sites you know and trust. And open the store's own page before you buy, since that's where the price and its terms are set.

Very low prices on expensive brand-name goods deserve extra care. The FTC says words like "refurbished", "vintage" or "close-out" can mean an item's in less than perfect condition. It also says a bargain price on a pricey brand can mean the goods are counterfeit or stolen.

Judge the price, not the badge

A store may have a genuine former price and still not be the cheapest place to buy. It may also have a fair price today with no "was" price at all. Either way, the crossed-out number tells you only what the seller says it once charged. The checks above tell you whether today's price is good.

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