Deceptive Pricing

Posted in Marketing and Strategy Terms, Total Reads: 504

Definition: Deceptive Pricing

Deceptive pricing is the method by which retailers use deceptive means to trick the customers into thinking that they are paying a lower price for the product, than what they are actually supposed to. Commonly used methods used by retailers practicing deceptive pricing are clearance sales and ‘going out of business’ sales, discount sales with hidden fees etc.

Another common form of deceptive pricing is the ‘Bait and Switch’, where an attractive offer is first shown to lure customers, and is later not honored.

In today’s scenario, there is another type of deceptive pricing used by many e commerce websites. The website may mark up the price of a product from its actual price and then offer a small discount on the marked up price, thus leading customers to believe that they are in fact getting a discount, when in reality, the prices that they are paying might be even more than the actual previous price.

Hidden fees and surcharges are commonly encountered today, while trying to buy an item online. The hidden surcharges are displayed only during the checkout, thus misleading customers and encouraging them to select these items while browsing.

For example, if the marked price of a Sports shoe is increased from Rs.2000 to Rs.3000, and then a discount of 33.33% is offered on the shoe, the customer is deceived into thinking that he is actually getting a discount of 33.33%, thus paying Rs.2000, but this amount is the same as the actual price for which the shoe could have been purchased earlier.



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