Used as a psychological tactic, putting discounted prices next to list prices tells customers that they are getting a bargain. The theory is that if customers see a product with a discounted price next to a list price, they are more likely to pounce and purchase the product.
“We’ve been conditioned to buy only when things are on sale,” said Truth In Advertising executive director Bonnie Patten. “As a result, what many retailers have done is make sure everything is always on sale. Which means nothing is on sale.”
As Patten mentioned, the problem with constantly putting products on sale is that customers cannot tell if something is a good deal when everything is on sale. This is an issue that Macy’s, J. Crew, Ralph Lauren, and others have either dealt with or are currently dealing with in court, thanks to lawsuits accusing retailers of fraudulent list prices that no one has ever paid.
As it relates to Amazon, out of 47 random discounted products the Times looked at in past articles, 39 of them no longer had list prices when recently checked. In the place of a list price was either white space or a previous price a product might have been listed under on Amazon.
Amazon has not said why it started making this change, though the prevailing thought seems to be that it wants to avoid lawsuits. A chief executive at a retail analytics firm believes that list prices are already on their way out; Amazon is simply expediting the process.
“Our data suggests that list prices are going away,” said Boomerang Commerce chief executive Guru Hariharan. “Amazon is a data-driven company with very few sacred cows. At the very least, it is conducting a store-wide test about whether it should change its pricing strategy.”
Given the company’s upcoming Prime Day, Amazon will continue to use discounts in some form as a means to sell products. At the same time, don’t be surprised if you see only one price for any given product.
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