False Advertising and Deceptive Sales Practices

The Schemes

We’re all familiar with the classic wisdom that “if it seems too good to be true, it probably is.”  Nowhere is this more accurate than in the world of advertising and sales practices.  Most businesses realize that truthful sales efforts build better customer loyalty in the long run.  But all too many sellers succumb to the temptation to gain a competitive edge by exaggeration, half-truths, or flat-out lies to sell their wares.

False advertising and deceptive point-of-sale business practices take many forms:

            • “Bait and switch” practices.  Advertisers or sellers offer unrealistically low prices to lure customers into their stores, only to use product disparagement and claims of unavailability as the tools to switch consumers to higher profit items.  Auto dealers, camera stores, and stereo and appliance centers are often involved in such cases.

            •  Perpetual sales.  Newspaper, TV and radio ads make claims of phony price comparisons and too-good-to-be-true discount prices to create the false impression of a special sale with a limited duration.  “WAS $99.99 – on sale THIS WEEKEND ONLY for $59.99!!!”  But in fact the product can be bought at that store for $59.99 all year long.  Often associated with this practice are carpet merchants, window blind stores, and some home furnishing businesses.

            •  Phony “going out of business” advertising.  Commonplace, especially during economic downturns, are ads claiming “LOST OUR LEASE” or “GOING OUT OF BUSINESS – LIQUIDATION SALE” in banner terms when in fact the business or chain of stores has no intention of permanent closure.  In another variation, liquidator companies bring in new merchandise from out of state and use phony mark-downs to mislead customers as to the extent of sales savings.  Rug merchants, furniture stores, and jewelry stores have often been charged with this tactic.

            •  False representations about product quantity or features.  Consumers trust what merchants say, and often don’t check to see if they actually receive what the seller promised.  High technology short-measure sales at gas stations and computer monitor screens which have smaller-than-advertised viewable area are examples of cases prosecuted under this theory.

            •  Supermarket and department store scanner accuracy.   Scanner technology has helped to speed checkstand operations but it has been accompanied by a continuing problem of overcharges when the store’s computer registers a full price when the former sale price sticker is still on the shelf.  Millions of dollars can be taken from the public a few dollars at a time through negligence or poor pricing practices.

            •  Prize and premium promotions.   “CONGRATULATIONS!!! You have won one of the following FABULOUS prizes!!”  So says the spam advertisement on your computer screen or the unsolicited post card in the mail.  All you have to do is supply the $49.95 shipping (for the worthless “gold plated” silverware) or provide credit card information (which may be used for identity theft). 

Help For Consumers

Every consumer can help prevent becoming a victim of one of these deceptive sales schemes.  Here’s how:

            (1)  Do your homework.  Don’t be an impulse buyer.  Read consumer journals or on-line information sources before you buy, and shop at more than one store for the best quality and price.

            (2)  Nothing in the marketplace is free. There is no free lunch.  Ad claims that seem too good to be true probably are.  Businesses provide much that is important for our society, but no business is run as a charity.  Don’t expect the fabled “free lunch.”

            (3)  Be vigilant.  Always check  your store receipts and invoices to make sure you got what you paid for and that you paid the right price. 

            (4)  If you’ve been victimized, complain effectively.  If the sales clerk is not helpful, seek his/her supervisor, and then if necessary put it in writing to the business owner or managing, stressing that you will pursue your legal rights if you aren’t satisfied.  If your efforts fail, report the matter to consumer protection officials and consider small claims court or other legal action.

Consumer resources include:

            •  The California Department of Consumer Affairs: http://www.dca.ca.gov/consumer/complaints.shtml

            •  The Federal Trade Commission at www.ftc.gov or hotline: 1-877-FTC-HELP.

            •  The California Attorney General’s Office Public Inquiry Unit 1-800-952-5225 or http://ag.ca.gov/contact/complaint_form.php?cmplt=CL