Consumer group says Sears, Kohl's mislead customers

SAN FRANCISCO (KGO) -- Are the sales you see advertised and on display in stores for real? That is the question Bay Area Consumers' Checkbook attempted to answer when it tracked prices for nearly a year. 7 On Your Side has an exclusive preview of the price survey.

The consumer group that's focused on retail pricing selected several items at each store and watched over time to see when the items were on sale and when they were not.

In a bold statement, Bay Area Consumers' Checkbook Executive Editor Kevin Brasler said, "I think that Sears and Kohl's and often Macy's and some other stores clearly are trying to mislead their customers."

Checkbook has been keeping track of sale prices at seven national retail chains for nearly a year. They're now telling a good news and bad news story about what was found.

Firs, the good.

"We didn't find any evidence of stores increasing their regular price to have a sale later on," Brasler said.

Consumers' Checkbook spot checked several items at Sears, Kohls, Macy's, Home Depot, Best Buy, Target, and Costco.

"What we did find though, is that among the chains we shop, especially Sears and Kohls and Macy's, sold items were either always on sale or almost always on sale," Brasler said.

"I am surprised," said Federal Trade Commission attorney Kenneth Abbe. "It is surprising given the FTC rules on sale pricing to see this type of thing going on."

Abbe cannot comment on this study or the stores featured in it. He can, however, tell us the sale price rules enforced by the FTC.

"You're definitely not allowed to have something for sale all the time, because then it was never offered to consumers at a real price that you are giving the discount from," he said.

So what did Consumers' Checkbook find?

"At Macy's, five of the items we checked were on sale half the time or more," Brasler said.

Macy's told 7 On Your Side, "The items... were not monitored every day," and added, "Macy's, however, promotes by day, not by week... so a weekly snapshot does not give you a complete and accurate picture."

Macy's also noted some of its items followed by Consumers' Checkbook were never put on sale.

Next up, Kohl's.

"At Kohl's, two of the items we tracked were on sale for every week or almost every week," Brasler said.

Kohl's has not responded to 7 On Your Side's request for information and comment.

Now, Sears.

"At Sears, really the problem was most acute," Brasler said. "And we're talking about almost all their items were almost always on sale and those sale prices were always at very steep discounts, you know, 40 percent off or more,"

In a statement, the company said: "Sears disagrees with any suggestion that its pricing is misleading or deceptive... We do not publicly discuss the details of our pricing strategy, however ... Sears complies with applicable pricing and advertising laws."

To check out the full report from Consumers' Checkbook, click here.

7 On Your Side asked the retailers featured in the Bay Area Consumers' Checkbook article for comment. These are the responses we received:

THE HOME DEPOT:

The Home Depot's Spokesperson wrote that at Home Depot, "... we closely follow FTC guidelines."

MACY'S:

At Macy's, our pricing cadence varies for each item, based on the nature and seasonality of the merchandise, its family of business and customer response, among other factors. Some items rarely go on sale prior to final clearance; others go on sale more frequently as part of promotional events.

Macy's prides itself on offering compelling merchandise which provides great value to the customer. We strive to comply with all laws and regulations, which generally allow for flexibility in connection with price promotions to allow retailers to respond to business trends. If a pricing error is brought to our attention, we act quickly to correct it.

Here are a few observations, based on the data you presented:

1. The items on your list were not monitored every day. In most cases, the data seems to have been collected at one specific point each week - every 6 or 7 days. And in the summary chart, columns are labeled "number of weeks" and "percentage of weeks on sale." Macy's, however, promotes by day, not by week - so a weekly snapshot does not give you a complete and accurate picture. Price may vary within the course of a week.

2. Two of Macy's items on your spreadsheet did not go on sale at all (Chanel and All-Clad).

3. Your summary chart says that the Levi's item was never offered at full-price - which is inaccurate. The Macy's page on your spreadsheet shows that, in the weekly survey, Levi's were offered at full price on 2/3 and 3/3.

SEARS:

Sears' Spokesperson wrote, "Sears disagrees with any suggestion that its pricing is misleading or deceptive. Sears is focused on providing its members with great prices on a wide variety of products and services. We do not publicly discuss the details of our pricing strategy, however we can confirm that Sears complies with applicable pricing and advertising laws. While we cannot speak to other retailers' pricing behavior, as a multi-channel, leading integrated retailer we are uniquely positioned to provide discounts to our members and customers in a number of different, legally compliant ways, including things like member pricing, store or online only promotions, clearance offers, and offers from third-party marketplace sellers. It is unfortunate that Checkbook.org did not appear to take these factors into account before making its assumptions."

Target:

Target's spokesperson wrote, "Target's goal is to provide exceptional, affordable, everyday shopping for our guests. We're committed to accurately pricing merchandise and continuing to comply with any applicable laws related to pricing. Guests with questions about a price are encouraged to reach out to the Guest Services for more information. "

Best Buy, Costco and Kohl's did not respond to 7 On Your Side's request for information.