Stores across the country will be offering what appear to be massive discounts on Black Friday, but industry insiders know that these sales are just a grand illusion. Most of the deeply discounted clothing at Friday’s 5 a.m. sales are in fact not as marked down as you think. Banking on the customer satisfaction of “getting a deal,” stores will often increase their prices before offering the coveted 40 percent off, selling their wares at the same price they would have on any regular retail day.
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Retailers like to give the impression that they are slashing prices of their overstocked, older merchandise as a way to make room for the new. But what really happens is a partnership between retailer and manufacturer, to set the original prices higher than normal, giving the retailer leverage for offering wild discounts upwards of 40 percent. Rather than lose money, the retailers end up selling more merchandise, to the bargain-hunting frenzy that haunts malls and stores at absurd hours of the morning the day after Thanksgiving.
Since 2009, even more retailers are jumping on the Black Friday sale bandwagon, with the average department store offering 63% more deals in 2012. To entice even more customers, the average discount has gone from 25 to 36 percent. Despite the increased “rate” of discount, big name retailers still see profits during the holiday season, leaving smaller retailers crippled as they try to keep up with the deep discounting trend.
Instead of fueling the fashion discount farce this Black Friday, take the time off to spend time with friends and family, or support local business if you have the need for retail therapy.
[Via Wall Street Journal]