J.C. Penney Sale Prices Mislead Customers, Employees Say

jc penney sale prices savings retail tags
Gene J. Puskar/AP

By Treye Green

Struggling retailer J.C. Penney is facing new claims that its unbelievable deals are actually just clever exaggerations.

According to former employee Gena Stone and current Florida employee Bob Blatchford, the retailer marks prices up in order to later cut them, creating the illusion of dramatic savings, reports NBC Today.

This revelation from Stone and Blactchford follows an undercover investigation last month by Cincinnati news station WCPO into the mark up practices of the retailer. WCPO uncovered that J.C. Penney (JCP) was placing new price stickers over older ones and then marking the items down to mislead consumers.

In her store in Virginia, Stone says, "All of a sudden, the rack of $7 shorts became $14, and then they were 50 percent off."

When asked what she told her bosses who instructed her to make these changes, she says she complied but wasn't comfortable doing so.

"They said it was coming down from corporate in Texas," Gena said.

The Huffington Post uncovered another example of altered pricing with the controversial "Hitler teapot" the store sells.

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The Michael Graves tea kettle was priced at $40 back in May. But on the retailer's site this week, the item's "original" price jumped to $58 and the "sale price" moved to $39.99.

As of July 25, the store's site has again been altered to show only the kettle's original price of $58.

NBC Today found a Dyson vacuum cleaner at the store that was advertised as on "sale." It was regularly priced at $725 and marked down to $649. But after checking with the actual manufacturer of the vacuum, it was uncovered that the J.C. Penney sale price was the same as the manufacturers suggested full retail price.

Speaking to NBC Today, J.C. Penney said that any items that are marked down must be "previously sold at ... regular price for a reasonable period of time."

"While we understand this transition back to promotional pricing may cause some temporary confusion, the company remains committed to delivering the quality, price and value that customers expect from J.C. Penney."

Priya Raghubir, a professor of marketing at New York University, told NBC Today that the pricing tricks being adopted by J.C. Penney are implemented by numerous stores in the retail industry.

J.C. Penney recently removed their CEO Ron Johnson after his failed attempt to overhaul the company and its image. His removal of the stores coupons and flurry of sales throughout the year alienated many customers, leading to large declines in store sales both online and in retail locations.

Former CEO Mike Ulman was brought in to try to turn things around. He has since brought back both coupons and sales.

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