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Retail bargains part of a mark-up scheme?

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We all like a bargain and stores rely on sale signs promising big savings to get customers into the store.

But, at a major national retailer, 7 On Your Side went undercover and found that those huge discounts might not be as big as they seem.

A quick look around Kohl's and you would think that everything is on a big-time sale. One example at the retailer: A Vera Wang sheet set is marked as $149.99, but, right under that tag, the original price is labeled as $89.99. The pillow cases are 60 percent off, but that is after Kohl’s raised the regular price of the item.

7 On Your Side shopped Kohl's stores in Maryland and Virginia, finding bedding, towels, places and other items all on sale after the “regular” price had been raised.

At the checkout counter and while the hidden camera is rolling, 7 On Your Side asks a clerk about the price mark-up. Eventually, the clerk gives 7 On Your Side’s Kris Van Cleave a calculator to figure out what the discount would be on the items in question.

“We don't do that, it’s the company,” the clerk said.

And despite the fact that similar price increases ahead of sales have been observed in California, Oregon, and Washington state in the last year, the company called them “infrequent”.

“I should probably go look at my stickers and see what I should be paying and what I paid, because its kinda slimy,” said shopper Christie Harp.

If the item you are buying has been re-priced being politely persistent at the checkout counter could get the clerk to give you the lower price.

Here's Kohl's response:

Kohl’s offers promotional events designed to provide our customers with exceptional value, and we pride ourselves on the incredible savings we offer. Decisions with respect to the establishment of prices for Kohl’s merchandise are made by Kohl’s merchandise buyers from corporate headquarters in Wisconsin. Prices are established on a chain-wide basis. Each Kohl’s buyer is responsible for a very narrow range of merchandise, which allows them to be experts in their product categories. When determining pricing, including any necessary price changes, the buyers consider a number of factors, including the regular prices of Kohl’s competitors for similar merchandise as well as Kohl’s costs for the goods being sold.

Changes to Kohls "off-sale" prices are infrequently made. These “Regular” or “Original” prices are clearly marked on the vast majority of the items sold in our stores, and our recent launch of electronic signs will not change that. While the percentage discount may vary from sale event to sale event, Kohl's does not raise “Regular” or “Original” prices on a short term basis just for purposes of offering deeper discounts during a future sales event.

As is common in the retail industry, from time-to-time, product prices are increased due to production and raw material cost increases. When these types of price increases are implemented, our stores are instructed to re-ticket all items currently in our inventory to match the prices on the tags for all in-coming merchandise. New receipts are correctly priced in accordance with our instructions to our vendor, so no re-ticketing of that merchandise is necessary.

As an example, upon the request of a CBS affiliate in Sacramento in December 2011, we looked at price increases for a Simply Vera Vera Wang sheet set. We found several price increases were made in 2010 and 2011 in response to the significant and well-documented worldwide cotton cost increases experienced during that period. In December 2011, Kohl’s was paying our vendor over 35% more for this sheet set than we did in February 2010 due to the rapid and continuous inflation of cotton prices during this period. As a result, our “Regular” retail price on this item was increased by the same percentage.

Moreover, Kohl’s constantly evaluates our competitors’ pricing for similar products and we are confident that Kohl’s pricing remains competitive in the department store marketplace.

While Kohl's prides itself on providing our customers with exceptional value, we would encourage any customers that may be unhappy with their purchases for any reason to take advantage of Kohl's quick, convenient and hassle-free return policy.

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