Investigation Reveals Phony Sales Prices For Merchandise
Attorney General Spitzer today announced an agreement with a leading department store chain that made phony sales promotions.
The agreement comes after an 15-month investigation of "The Bon-Ton" department stores, a Pennsylvania-based retail chain with 26 stores in New York and more than 70 stores nationwide.
Spitzer’s office found that many of Bon-Ton’s sale prices involved little or no discounting of merchandise.
"Bon-Ton stores routinely characterized regular prices as sale prices," Spitzer said. "The reality was that consumers were not buying discounted items and were not receiving a bargain of any kind."
"This case sends a clear message to retailers that false and misleading sales promotions will not be tolerated," he said.
Since at least the fall of 2000, Bon-Ton was using newspaper advertisements and radio and television commercials to promote jewelry, small appliances, luggage, mattresses and furniture at prices discounted by "up to 60 percent."
The investigation by Spitzer’s office determined that "sale" prices did not represent a discount from the price for which these items generally sold.
For example, during an 18-month period, the Bon-Ton sold some 1,611 Samsonite Silhouette luggage sets. Of that number, 1,599 of the sets were sold at the "sale" price of $221 and only 12 were sold at $370. Further, the so-called regular price was offered to the public only 7 percent of the time.
In settling the case, Bon-Ton has agreed not to promote any item at a discount from a "regular" price unless the item has been offered at that price for a reasonably substantial period of time. Spitzer said that this provision would guard against misrepresentation of the price reduction on "sale" items.
As part of the agreement, Bon-Ton also agreed to pay $100,000 in costs and civil penalties.
Spitzer said his Consumer Frauds and Protection Bureau continues to monitor Bon-Ton and other retailers for misleading sales promotions.
This case was handled by Assistant Attorney General Dennis Rosen and Senior Investigator Peter J. Eiss of the Buffalo Regional Office.