JC Penney Reintroduces Fake Prices (and Lots of Coupons Too, Of Course)

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In early 2012, JC Penney promised the end of “fake prices”—ones that were inflated just so that shoppers could be tricked into thinking the inevitable discounts represented amazing deals. Well, it’s already time to welcome back discounts and inflated prices alike.

Among other reasons, JC Penney CEO Ron Johnson lost his job recently because customers seemed to hate the no-coupons, no-discounting “fair and square” pricing that was a core part of the retailer’s dramatic 2012 makeover. In a new ad, JC Penney is apologizing for the changes made under Johnson. “It’s no secret. Recently, JC Penney changed,” the ad’s voice-over states. “Some changes you liked and some you didn’t, but what matters from mistakes is what we learn. We learned a very simple thing, to listen to you.”

“Come back to JCPenney,” the ad implores customers — especially the ones who were turned off by Johnson’s initiatives, one assumes. Nothing is specifically mentioned regarding pricing, coupons, or sales. And yet the ad, and JC Penney’s overall effort to woo back customers, has a lot to do with pricing, coupons, and sales. Soon after Johnson stepped down as JC Penney CEO, analysts began anticipating the return of “sales galore” as a magnet to win over alienated shoppers.

Indeed, at first glance, it appears as if the sales are back in a big way. A recent JC Penney brochure lists dozens and dozens of items on sale for Mother’s Day, and an online-only coupon (promo code: DEAL4ME) offered shoppers 15% off on purchases of $100 or less, and 20% off orders over $100 made by May 2.

(MORE: The 5 Big Mistakes That Led to Ron Johnson’s Ouster at JC Penney)

But JC Penney’s changes of late aren’t limited to an uptick in sales and coupons. As Reuters reported in late March, even before Johnson was fired, the retailer had quietly started raising its “everyday” prices—mainly so that stores could regularly put them on sale and hope that more shoppers bite. “Under the strategy, an Arizona crewneck T-shirt that had an ‘everyday’ price of $5 now has a $6 pricetag to allow Penney more room to offer a markdown and arrive at the same price,” the article explained.

The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it’s discovered is that the prices of certain items—designer furniture, in particular—have risen by 60% or more at JC Penney almost overnight. One week, a side table was listed at $150; a few days later, the “everyday” price for the same item was up to $245.

Of course, that $245 table could be purchased for a lot less if the shopper waits for it to go on sale, and/or if it’s purchased when a coupon is available. Accordingly, the folks at dealnews offer this advice:

Our recommendation for JCPenney shoppers: keep your credit card in your wallet until these products go on sale. If you’re looking for a special collaboration line, wait until the price is marked 50% to 60% off so you aren’t paying more than you would have before the strategy change.

Things would be much simpler for shoppers, of course, if JC Penney kept that table priced at $150 all along. But remember: Johnson lost his job partly because shoppers rejected his “fair and square” flat everyday pricing. When a table always costs $150, there is no sense of immediacy for shoppers to buy it now. Shoppers also didn’t really buy into the idea that $150 was a good price for the table. But a $245 table that’s marked been discounted to $150? That’s perceived as quite a deal.

(MORE: Epic Retail Fail: Where Did the Target + Neiman Marcus Collection Go Wrong?)

JC Penney’s failed experiment in fair and square pricing reveals how irrational shoppers can be. Yet as a Science News post explained, Johnson’s pricing system failed to resonate with customers precisely because stores removed the cue that helps shoppers make what they think are logical, value-driven purchasing decisions. “By not showing marked-down prices, Penney’s removed an element that helps shoppers feel rational,” the post noted. “Seeing that marked-down price next to a higher original price provides an important yardstick for gauging whether we should buy something.” Put another way, with a specific example:

We see a $14 shirt, and conclude based on its price that it must be a low-quality garment made in a sweatshop somewhere by overworked, underpaid workers. On the other hand, seeing a red line through the $50 price tag on a shirt that’s marked down to $14 indicates to us that the shirt is of high quality and that for $14, it is a steal.

A year ago, nearly every item in a JC Penney brochure came with just a single price. Today, most feature no fewer than three prices: sale, original, and “appraised at.” (The latter is a price that no one ever pays.) When coupons are available (online or otherwise), prices can be tweaked further.

(MORE: How Walmart Plans to Bring Back ‘Made in America’)

It’s all a game, one that’s employed by many retailers—most notably, the JC Penney of old. It’s considerably more confusing and complicated than a flat everyday pricing system. But this is the game that JC Penney shoppers have been asking for to return over the last year or so.

159 comments
malexj93
malexj93

The reason why JC Penny failed is because they essentially said that all of their things are worth less than other peoples. The reason sales work is because people see the tag, and they see that the jeans are worth $60, but they can have them for $20. While they may have just bought a pair of $20 jeans, they're convinced that they're really $60 jeans. At JC, they would see $20 jeans on the rack being sold for $20. They would see that the jeans are only worth $20, and they'd rather spend $20 on getting $60 jeans on sale.

rreiss
rreiss

I'm glad that JCPenny is being sued! I was recently hired and fired in the same day after 4 hours of work. I was hired by the store manager. My job was to mark up merchandise so they could then put it on sale. The manager told me this was to attract more customers. The reason for my dismissal said the store manager, was they over hired for this position. There was a group of maybe 10 people doing these markups, me being the oldest. I made a few comments (i.e. wow, this bracelet is going from $62 to $92 etc). I hope they get sued for their fraud and trying to fool the public. 

jkantor
jkantor

Apparently there's nothing stupider than a bargain hunter.

Osiris
Osiris

I won't shop at JC Penneys ever again because I value ethics and honesty.  Liars, even corporate ones, should not be tolerated. 

ReasonableGuy
ReasonableGuy

During Mr. Johnson's JCPenney, fair prices time, I made a point and shopped at Penney's twice, and bought the item I was shopping for. Even though the closest Penney's is 23 miles from home. 

Prior to his time, I had not stepped foot in a JCPenney's store for 15 or 20 YEARS.

His strategy did get new customers. 

But apparently Penney's needs to rely on shopping addicts (aka "fools").


jessindeed319
jessindeed319

I was loving the new "no coupon" JCPenney.  I really HATE walking into a store, seeing an item I want, and realizing I didn't bring my recycling bin with me so no coupon for me!  bleh..   The stores had finally started looking "hip, smart"  and the prices were great without having to worry whether I had timed myself right with a coupon in hand.   Stupid consumers and their stupid need to "think" they need to have a sale.  It's why I never shop at Kohls.  Their prices are horribly inflated, and their quality is pretty awful.  Penneys had great quality.  I love the St. John's bay line of jeans.  I hope at least that continues.   

leasetegn
leasetegn

I actually loved the "fair and square" pricing and thought that shoppers overreacted. However, I am shocked to discover the discontinuation of the St. John's Bay jeans (and I'm assuming other items). I also noticed while shopping tonight that the Stafford collection of men's stuff seems to be pretty thin on the ground. And the new brands that are in the store - at least in the men's section - just were not what I go to Penney's for. And there were a lot fewer items to choose from in every department. The purse selection looked like a bargain discount store's offerings. What the heck went on at Penney's this last year???

mnewell35
mnewell35

Still no St Johns Bay relaxed fit jeans.  What a shame the JCP discontinued such a popular product.  I don't care about the pricing schemes and if you want everyday low prices or higher prices with a discount.  Just supply the product that I use.

notLostInSpace
notLostInSpace

Why I think JCP is losing it.  Service.  Last Christmas we were out shopping.Needed a watch battery.JCP was nearly empty, and in fact looked like they were closing they had so little inventory on display.Went to jewelry, lady said they could change battery, it would be $10, can I wait while she takes care of another customer.The “another” customer left about 30 seconds later but the lady started a ten minute conversation with another clerk.I was very visible, meaning my 300 lb. body did not go out of sight.She continued to ignore me until finally I did just walk away, calmly, slowly, hoping to get a “Mister, I can help you now”.Went to Macy’s, same mall.Clerk there took my watch, changed the battery, and gave it back to me.I said what do I owe you?“Nothing, my pleasure”.I do not work for Macys and do not have stock, but to me they are the last of the decent large scale merchants that try to offer service and selection, and although I think they price themselves out of a lot of business I try to buy there when I can.I keep telling my kids, if we don’t help them (and grocery stores) survive then all we will have is Wally World and their lousy selection and cheap products.

LoneTruth
LoneTruth

This just in: consumers are idiots.

EricaCorinneDenigFoster
EricaCorinneDenigFoster

People are addicted to the crack that is coupons.  We at JCP as workers loved the prices and lack of coupons/sales confusion  but customers want that artificial price then that artificial savings... I guess it is what it is.

JustinMoore
JustinMoore

what matters is what we learn...what a dumb statement...companies are not supposed to learn...they are supposed to be able to do things that make sense and are good for the business and the customer.  That's just like saying oh i tried to run over a black man selling lawn care hopping the curb and narrowly missing him but i learned my lesson.  that is a complete idiots way of thinking...

DebbieOneal
DebbieOneal

Good news st john bay is returning several summer items in store now more to come they say. But have noticed huge spoke in prices now hmmmmm

pbug56
pbug56

Maybe the pricing games were not the issue.  Maybe they had issues with product quality, customer service, and product availability.  Some examples;

1. They used to have a quality control department in NYC where their HQ used to be.  HQ is long gone from there, and obviously they have no quality control whatsoever.  

2. I used to buy dress shirts from them.  For years the fit was consistent and the shirts were well made.  Eventually, though, the shirts I bought would shrink substantially after a few launderings, the collars would lock in dirt and sweat, the buttons would either break or come off.  They just didn't hold up or look good any more even with professional laundering.

3. I also bought their Big Mac work shirts, that they started selling several decades ago. One day they just dumped that line, despite numerous customers begging them not to.  But hey, the quality of those shirts had gone way down as well.  

Over time I've found it harder and harder to buy anything viable from them.  Now I no longer buy anything from them.  Nor does anyone else in my family, or anyone I know.

edkollin
edkollin

Another case of a company with a mature profitable business with loyal satisfied customers who in panics when a competitor becomes the new cool and cutting edge. Result a poor hybrid that does not impress the new crowd. Long time customers are viewed as an obstacle to progress and is treated as such. In the computer world it is Microsoft in a panic about Apple and dumps on the tradition mouse, keyboard users in an attempt to get the tablet, mobile crowd with Windows 8. In the 1980's it was Coke who panicked over Pepsi.     

DanP
DanP

I have not been to a JC Penney store  in years, nor could I find any friends who have...... Time maybe for them to go the way of Montgomery Wards and Federals.

MarcDaneker
MarcDaneker

Just one of the saddest truths in the world, we've been programed to not believe the truth and to live for the lie. Sick, Sad, World.


thompson154
thompson154

I'm so excited about the New JCP!!!!  who does'nt want to pay more for an item or wait for a sale?   I have read hundreds of articles about Ron Johnson these past 2 years and i'm ready to hurl.  His vision was perfect for this company. The execution and timing  perhaps could have been spread out.  It is about the experience and the difficult thing in the 21st century is that NO ONE has a clue what the NEW RETAIL will look like. It is taking shape and Gen Y will be the ones to determine that Not RJ!

 In My opinion the mistake that JCP made and is making is that they needed to go private.  Yep.  Buy the whole thing back and get the critics and wall street off your neck. 

ForbesBenny
ForbesBenny

This is a strategy!!! like the author Vivek Sood said in  The 5 star business network  which is all over Goodreads.com there are different business trends, models and strategies that can help students and business execs in making their business flourish. According to Vivek a business needs to have new gigs and be a trendsetter AND JCPenny is doing their own strategy right now

DebbieOneal
DebbieOneal

It wasn't the pricing that made me leave jcp that I shopped at and loved. 1 it was the trashy look store took on. 2 crappy customer service. 3 dropping great brands such as st johns bay. Store is nothing as good as Kmart now I don't go there either. Store looks and feels awful

DebbieOneal
DebbieOneal

It wasn't the pricing that made me leave jcp that I shopped at and loved. 1 it was the trashy look store took on. 2 crappy customer service. 3 dropping great brands such as st johns bay. Store is nothing as good as Kmart now I don't go there either. Store looks and feels awful

Itsashame
Itsashame

I have read all these comments and none of you have anything nice to say ..Remember the old saying ..If you have nothing nice to say don't say anything at all..I like jcp. They have some of the best people working there and i want to see them succeed. Sadly , I feel with all of you feeding into a negative frenzy success may not happen

TheLe
TheLe

You should do a little more research before making comments about pricing, author. There wasn't a single price for everything -- there was a discount price and an "every day" price, which was heavily confusing. 

smunder
smunder

My problem is that JC Penney has brought in brands that I have never heard of, eliminated the brands I purchased and has turned it's store into a series of nonsense specialty nooks and is now selling birthday party supplies from Martha Stewart. I will not be returning, you've lost me.

LindaBl63487293
LindaBl63487293

Nothing ever changes. I'm in my  60s and when I was in high school, I worked part time in a ladies clothing store. When they were going to have a sale, we put all new higher prices on beforehand so we could give a discount on sale day. They were paying the same price as before the sale.

FayeHogan
FayeHogan

My last two shopping trips to JCP were simply annoying.  I had a dress (from a rack full of the very same dress) that the register declared  could not be purchased.  The manager came over, said she didn't know why, but she couldn't sell it to me because of the register's message.  I came home, went online, and there it was FOR SALE on the JCP website.  The next time I went to two different out of town JCPs.  There was a multiple use online coupon posted on the JCP website, but I had inadvertently left it at home and am unable to access coupons using my phone .  The first JCP had a single copy at the register for all customers to use and the cashier gladly applied it my transaction.  The second JCP cashier smirked and said I had to have my own coupon to get the discount.  She had me on a technicality and consequently, lost the sale.  Anyone could've printed 100 of those coupons if they wanted to and it didn't have to be surrendered at the time of purchase.  She knew the coupon code.  People had been using them all weekend long.   I mean really... if they are so desperate for business, have merchandise that can actually be sold and stop the games with coupons.  I'm certainly not rushing back anytime soon!

stace
stace

Perhaps if the store was not as trashed as a Goodwill with things tossed on the floor and and no 2 identical things hanging on the same rack. Then there is the atrocity that is their shoe department with all of 5 shoes. They need to rethink a heck of a lot more than their pricing. They need to uncrowd the store and organize a heck of a lot better and stop shoving accessories and shoe departments in the store when it is obvious they don't have much stock (and it is terrible quality) nor room for the limited stock they have.

KimberlyTaylor
KimberlyTaylor

We have a market in my town that does this exact thing. They'll send out a flyer with prices that aren't really that great, and say the original price was like $5 more before the sale, which is a lie. My mom works there and even believes this is what they do. Can places get in trouble for this? They should! All this is is a tactic to trick people into thinking they're getting an item at an awesome price when they're really just being lied to.

lbcolorado
lbcolorado

I stopped going in to the store as I did not like anything they carried.  They used to carry nice suits for women and womens clothing overall was relatively good.  I have been in the last year and just could not find anything to spend my gift card money on - how sad is that - free money and can't find anything.  So, I went to Kohls - mission accomplished.

reya
reya

Quite simply, the clothing style changed dramatically.  The prices were NOT better.  I shopped there once a week..atleast 2 times a month.  I bought everything there and only there.  I haven't purchased one thing in a year.  I go back now and then but they don't cater to my tastes any longer and the prices are still higher than a good sale price.  I found a receipt from 2010.  Bought 8 shirst, 4 pants, 10 pairs of summer shoes-$102.24.  Sorry, can't do that any longer.  I used to find shirts there for $3.00 on sale.   The end of the year shoes you could get for $5.00.  I can't even find a pair of socks for $5.00 now there.

JamesFoster
JamesFoster

I used to love getting sweaters, shirts, ties, and sometimes jeans and pants in JC Penney.  After the redo, it was hard to find anything I liked.  The last straw was when I went to buy my wife a new set of gold earrings.  I always managed to find nice earrings as JC Penney.  This time, not only was the selection crappy, but overpriced.  I ended up going to a jewelry store in the mall to buy what I wanted.  It's not about the "sales" for me.  I know that the prices are artificially jacked up to make it look like you're getting a deal.  I can't believe how people fall for that gimmick.  Ever known a mattress store that didn't have a sale going on?  I look for quality and a range of selections.  JC Penney disappointed me.

asdfghjk
asdfghjk

If you go briefly back in time and limit your shopping to the women's clothing sales, you'll see JCP prices were higher than average. There were/are much better deals to be found at Kohl's, TJM, Marshall's, even Macy's. JCP did have superior shoe clearance prices (though not the best selection)… but as far as womens' clothing prices go, JCP prices were fair. Never great.

sunnylakay
sunnylakay

I quit going to Jc Penney's because they chose to change who they catered to. I could care less what color or religon or sexual preference wears them. I simple didn't like the styles they began to offer. My husband will never wear skinny jeans (thankfully i might add) and my kids would much rather wear ambercombie or areopostal or buckle. I am quite happy with my NY Co. I think they are looking for a younger more urban crowd and we are straight from the south. We own our own company and can pay what ever we choose for clothes we just don't choose to shop there.

girly4266
girly4266

@Osiris

Penny's wasn't lying. They simply changed their strategy.  Like   mentioned early; people don't want to see discount pricing on items as the only price.   They would rather see a higher price and have a red mark slashed through it saying it's on sale for 40% off.  As presented in the article, the public perceives that a shirt that was regular $50 is marked down to $14 then people think the item must be of high quality because it was originally $50.  Penny's was trying to save marketing costs  by just giving you the marked down price in the beginning. Similar to what Wegmans food market does on select items like Milk and bread.    But the problem  is they should of tried it out first to seeing how this was perceived by the public before exercising it in every single store.   Obviously the public didn't like it.  JCP is still the same quality store offering some very fine quality products Worthington, Levis, Statford and Liz Claiborne.  There is no other place where you can get quality lines like this for their price.  You can go to Macy's or Kohls but you'll pay 10-20% higher in price for the same quality item.  I'm staying with JC Penney. They simply messed up a marketing strategy and I'm willing to forgive and forget!!!  



 

girly4266
girly4266

@leasetegn 

I'm with you on this and I was so happy to hear that JCP recently reinstated the St. John's Bay line.  Love this line

of clothing!!

EricaCorinneDenigFoster
EricaCorinneDenigFoster

@DebbieOneal Well welcome back because we've brought back St. John's Bay are retraining customer service associates and hiring more workers.  Try it again see how you like it.

Rio
Rio

@DebbieOneal  You are so right!  I was a loyal St johns Bay customer.   The quality suffered and loss of many stable brands hurt as those customers found other retailers who would serve their interests.

JustinMoore
JustinMoore

@DebbieOneal a lot like macys ...it looks like kmart with all of the discount pricing etc...the merchandising is horrible.  As is the product selection...the only reason macy's i believe is still in business is due to the internet as internet sales are sent to each store to fulfill in order to boost sales for each store...let's see 46% increase in internet sales in december resulted in overall company sales increase of 4.6 for the company...hmmm sounds like store sales are in the crapper...

sltahoe881
sltahoe881

@Itsashame Agree. I liked the new pricing system and felt they were definitely competitive and fair. Problem is that American shoppers don't know value when they see it. Probably have trouble when traveling to countries where they have to barter with the salesperson on items which don' have a price tag.

Itsashame
Itsashame

Actually there were 3 prices ..an everday price (reg) a best price (clearance) month long value ( monthly sale)

JudyD
JudyD

JCP.... bring back St. Johns Bay. 

jcpworker
jcpworker

Its not the associates fault that the store looks trashy. We try to maintain it as much as we can while helping customers. I've closed at jcp many nights. And most of the trashy ness of store comes from the customers throwing stuff around instead of picking up after themselves or there kids. Many times I have been cleaning a section to only have customer come up try on different pairs of shoes to only leave them on the floor scattered around. She couldnt even put them back in the box for heavens sake. The store wouldnt look so trashy if people picked up after themsleves. Also some customers might not want something anymore and just place it were every its convent for them. Even if its in the wrong place or department. Dont blame the store for looking trashy it gets cleaned every night. blame yourselves for not putting your stuff back and leaving things around.

Coleen
Coleen

@lbcolorado I feel exactly the same way.  They used to have quality merchandise, both clothes and home interior items.  Now it is all cheaply-made junk.  I, too, had a coupon and could find nothing worth buying.  I also go to Kohl's and Macy's if I want anything.

asdfjkl
asdfjkl

@reya that was in 2010. Prices go up for everything over the years. Easiest example to look at would be gas prices, look at how much they've risen since 2010, but do you still buy gas?

reya
reya

Totally agree with you here.  I left for the same reason.  Plus, I shopped there often enough to know what I spent on 'deals'. No longer could I find a purse for $12.00 that was originally $50.00.  The best price  I could find would be $25/$30.  They thought they fulled us.  I shopped there once a week.  I know I was not getting the best price.  Then the line of clothing was totally for more metro people. 

texrat
texrat

@sunnylakay I went in recently just to find a nice shirt.  Could not find anything I liked.  Meanwhile, racks overflowing with good choices at Kohl's.

asdfjkl
asdfjkl

@JudyD They have brought back St John's Bay. Every store may not have it, but a lot of them do and it's back online.

sltahoe881
sltahoe881

@asdfjkl @reya Gas is not a good example. Prices are set by international demand for the product and Wall Street speculation. Gas is now cheaper than it was during the summer of 2008. Yes, prices for most items go up due to inflation. 

jcpworker
jcpworker

Ok you answered your own question. Items go up due to inflation. Just like the price of food goes up, clothing and shoes go up too.