Is JC Penney faking its prices?

After taking a stand against phony pricing last year, the embattled retailer is reportedly asking suppliers to concoct 'fake' prices to make discounts look better.

By Aimee Picchi Jan 24, 2013 4:02PM

Customer Service counter at the J.C. Penney store in Westminster, Colorado on February 20, 2009 ( RICK WILKING/Newscom/RTR)Just a year ago, J.C. Penney (JCP) had a bold marketing plan: vanquish "fake" prices and offer simplified pricing that would do without markdowns and sales. 

But a new report says the retailer is still faking -- and this time around, it's allegedly playing the same old mind games that it disavowed. 

Penney is reportedly asking some manufacturers to make up "phony suggested retail markups" for their clothing, reports the New York Post.

Then, to give shoppers the perception of hitting upon a bargain, Penney's stores reportedly tag the clothes and accessories with the chain's own lower prices, the Post reports. In one hypothetical example of how the strategy works, a table with sweaters might have a sign reading $30, but the price tags on the clothing could read $22.

One thing's for sure: J.C. Penney is under a lot of pressure. 

Doubts are swirling about the company's turnaround plan, with UBS analyst Michael Binett earlier this month saying he expected same-store fourth-quarter sales to drop 28%. The company is expected to report fourth-quarter results on Feb. 27. 

Penney is asking manufacturers put in writing the suggested retail prices, to ensure it can back up pricing claims, according to the Post. Penney officials didn't respond to the newspaper's requests for comment. 

CEO Ron Johnson, a former Apple (AAPL) executive, has bet the retailer's turnaround on a "fair and square" pricing strategy. The company debuted splashy ads featuring Ellen DeGeneres making fun of marketing gimmicks.

So far, it appears shoppers aren't buying it. 

Revenue has declined by more than 20% for three straight quarters, while the stock has slumped 47% during the past year.

More in moneyNOW

Tags: Retail
Jan 24, 2013 5:44PM

I would never shop at this store again...after being a card holder for over 20 years they craped on the loyal customers!

They made thier sleep in it!


Kohl's has had my business for the past 3 years...

Jan 24, 2013 5:44PM
I guess it depends on the location of the store.... J.C Penney  @ El Paso TX has plenty of good bargains/ tops  $4.00 -$10.00 very cheap jeans starting at $10 ....  great quality for the price!
Jan 24, 2013 5:44PM
I was on to J.C.Penney's some time ago.   Jack up the prices then mark em down.  Yeah, whatever.   I've noticed poor quality @ Macy's as well.  Poor quality in every thing from washing machines and refrigerators  to cars, clothing and etc.....  Do you think  "Made in China"  has anything to do with it??
Jan 24, 2013 5:43PM
Their pricing tactics are nothing new to the retail market.  What they are doing all other retail stores do the same thing.  The problem is that the QUALITY of their merchandise has gone down.  They no longer sell good quality clothes.
Jan 24, 2013 5:39PM
I am very dissappointed with Penney's.  Their marketing technique was a big mistake!  I hardly shop there at all!  I did NO holiday shopping at Penney's at all!  They should go back to their previous marketing in order to gain back consumer's, such as myself!
Jan 24, 2013 5:38PM
 Two years ago I could not stay out of JCP,  they were stocked with a good variety of items, especially hand bags, at some reasonable prices.  I guess like everything else, all good things comes to an end.  I am also having the same issues with TJ Maxx.  We love JCP, and hope that they can find their way back to some fine merchandise, with some good bargins...
Jan 24, 2013 5:32PM

JCP has been doing this for years! Anybody who has shopped online with them and has seen the "buy 2" prices or has seen what they're dumping overstocks for at their Clearance site would have to be blind not to figure it out! Jos. A. Bank is playing the same game with their special sales and markdowns!!!


One day older and two days dumber!!! When you see these games going on, refuse to buy. Then maybe the "whiz kids" will stop insulting our intelligence! Or better yet, only buy when you are certain that the price is rock bottom based on at least a year of watching items of interest!


Buyer Beware!

We used to go to JC Penny 2 years ago when they had good sales but ever since this clown took over the company it's been a constant disaster. I used to go there for glasses too but the quality there is lacking.
Jan 24, 2013 5:27PM
I'll have to think twice about buying anything more from Penny's. Most of their clothes come from countries that make better garmets (compare theirs to Walmart), but to jack prices up wholesale so the retail can be cut isn't right.  Sounds like what Apple does, oh wait, penny's is run by an ex-apple guy. mmmmm!!    
Jan 24, 2013 5:26PM
Went into Jcpenny. They are still the most expensive, and the ugliest stuff around. So much color, you would think it was the 70's
Jan 24, 2013 5:22PM

a retailer can put any price on their product why ask suppliers to mock costs ???  all it takes is putting a sticker on the product then slashing what u wanted to sell it for later on down the road what all retailers do anyway


Jan 24, 2013 5:19PM
I went into Penneys the other day and one thing is very noticeable is the lack of merchandise.  Less clothing racks and more spaces betweens all merchandise.  I have noticed even on-line that Penneys is carrying less merchandise.
Jan 24, 2013 5:13PM

As an outside contractor who did some work in a JCP store, I was able to see the new pricing scheme up-close, immediately after JCP introduced it.  They made it sound like the whole store was deep-discounted when that just wasn't the case.  The only deep discounts I happened to come across were past season and clearance items that they desperately wanted to get rid of, and should have either been donated or thrown in the dumpster.  JCP never recovered.  People went into a JCP store expecting one thing, got another, and never came back.


JCP somehow managed to screw up the "for the whole family" genre of sales.  Using blue jeans as an example, people do not consider womens' jeans on weekly special, mens' jeans on monthly special, and kids' jeans at every day price to be a sale.


The new "boutique" format has a chance to work, but it's something that will take 3 to 5 years.  This company is lucky to have 3 to 5 quarters left before it's BK time.


If 4th quarter 2012 sales are as bad as they are being forecast, JCP is finished 1st quarter of next year. They'll try to hold out for one last-ditch 4th quarter this year.  The whole purpose of the 4th quarter and holiday sales is to pull one out of your backside to salvage a lousy year, not to take your year head-first off a cliff.

Jan 24, 2013 5:11PM
The quality of their products is so bad now no price reduction will save them
Jan 24, 2013 5:07PM
They've changed their product lines and alienated a lot of their older female customers. That's part of the problem; you can't dismiss a huge percentage of your customer base and expect sales to go up. I can't tell you how many older ladies I've talked to that feel like they've been dumped by JCP.
Jan 24, 2013 5:06PM
Used to LOVE JCP.  Lack of selection and quality are driving me away.
Jan 24, 2013 4:57PM
Guess the fages didn't bail them out after all ! Don't go away mad . Just go away !!
Jan 24, 2013 4:49PM
I feel the same way,I don't see anything cheaper even with the sales!
Jan 24, 2013 4:46PM
Wow... And this is news? Everyone knows that every single retail store does this! I sold tools for five years. I had one tool, for instance, that was $149.99 yet was always on "sale" for $99.99. About once a month, it would go off sale for a day or two and then go right back on so that we could say "just reduced."

If you go to Walmart or any other store, you'll see things that are simply on sale all of the time and never go off. If you pay attention closely, you'll see that they raise some prices but then put them on sale to the original price so that it looks like a bigger sale. Why does MSN always want to pick on one specific store? Every retail store does this and it is nothing new. If you're blaming Penney's for this deceptive tactic then you must also blame every store that you have ever been to or else you're just making a double standard.

Jan 24, 2013 4:41PM
The quality of their items has been reduced along with the price. Also, the selection is not as good as it used to be. You get what you pay for. Kohls for me.
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