At half-price that sofa looks as though it's a bargain. But will you really save any money?

Sale reductions are not always what they seem. Even discerning shoppers can sometimes be misled. By Frances Howell
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The Independent Online
The sales season is upon us. Bright red labels with "Save 50 %" are beckoning the crowds into the shops and up to the tills. Harrods has knocked a staggering pounds 230,000 off a ladies' watch, by reducing it to half-price. Anybody with the cash and the inclination could buy a family home with the money "saved".

Although we are all well aware of the glaring economic fallacy of saving money in this way, most of us know the feeling of staggering home laden with sale bargains destined for a permanent home at the back of a cupboard. So why do we do it?

"It is almost a hunting activity which we engage in with retailers," suggests Dr Robert East, principal lecturer in marketing at Kingston University.

Sue Keane, an independent consumer psychologist, offers a tamer solution. "People are always looking for ways to make their money go further, so they are tempted to buy stock labelled at a discount."

Whether you see yourself as a hunter or a domestic economist, snapping up a bargain can be hard to resist. The sales are a time of temptation. But price reductions are not always what they seem.

Even the discerning shopper can be easily misled into believing that a sofa is being sold at half of its real price by a price tag of "pounds 499, reduced from pounds 999, 50% off."

The real story may be that the sofa was retailed at pounds 999 last week in a branch in Newcastle, simply to attach a half-price label this week in Bristol. The real price of the sofa is pounds 499. However, the retailer is all too aware of the selling power of a discounted price tag.

It is illegal to advertise prices as discounted unless you follow the Code of Practice in the 1987 Consumer Protection Act.

This states that for an item to be labelled as discounted from a previous higher price, it must have been retailed at the higher price for no less than 28 consecutive days within the preceding six months at that particular outlet or branch, with the exception of perishable goods.

However, this can easily be disclaimed. The price tag on the discounted sofa would be legal if there was a visible and easily seen sign somewhere in the shop stating that pounds 999 was last week's price in the Newcastle branch.

Ed Chicken, of the Institute of Trading Standards, advises consumers to be wary.

"Kitchen fitters in particular are famous for advertising amazing discounts when in fact they bring out a catalogue and immediately drop their prices," he says.

The gall of some retailers is remarkable. Mr Chicken once prosecuted a regional chain of bedding suppliers in North Yorkshire who claimed to be having a half-price sale, but had actually raised prices.

Within the boundaries of the law, the concept of one item, one price is dwindling as retailers maximise the use of price reductions as an all too effective marketing tool.

You may not need a third blue shirt. But since it has been reduced from pounds 29.99 to pounds 19.99, it seems to be a bargain and you might regret missing it, even though it is a fraction too tight around the collar.

You buy the shirt at what you think is a mere two-thirds of its real price, and return home a happy hunter, your game neatly folded in a carrier bag.

But the actual retail price of your new shirt may be pounds 29.99 at first, then pounds 24.99 if less than 2,000 units have been sold by a certain date, and pounds 19.99 for mid-season clearance.

Professor John Coyne, head of the business school of De Montfort University says: "The real price of goods marketed in this way is the price after the discounts."

While you regale your friends that evening with the story of your great buy, the smile is on the retailer's face.

"This structured pricing has made it difficult for retailers such as MFI, Burtons and Woolworths to reduce prices on a standard basis. Woolworths used to offer an Every Day Good Value pricing policy that simply offered goods at consistently low prices.

However, this couldn't compete against the big-ticket and discount approach of structured pricing," says Professor Coyne. ''The retailers' use of this shows that the psychology must be there."

Despite the success of marketing strategies such as structured pricing, shoppers are by no means hapless victims.

"All my work has suggested that consumers are incredibly bright," says Peter Barron, Professor of Marketing, also at De Montfort University. "They form habits and learn very quickly. They are better informed and, because we live in a more affluent society, they can afford to wait for the sales.

"When they get there, they now recognise the dross, and you don't see the mad scramble you used to."

But the modern shopper is not infallible. Professor Barron admits that everybody will get sucked in once in a while.

Professor Coyne is frank: "I love a bargain," he admits.

Sue Keane confesses: "It's simple, we are tempted. Just the other day I almost bought a a brightly coloured Mexican-style dress from the rack of an expensive shop simply because it was only pounds 25. Fortunately, logic took over."

So, take care when buying goods marked "Seconds" and - Good Luck. Before you shop Do: keep your self-discipline. Look, go away and come back the next day. If something is cheap, the fact that it neither quite fits nor suits you can be easy to ignore. If you have doubts, don't buy. The key question is: do I really need this?

Don't: take credit cards. Having them on you will undermine your resolve when it comes to the crunch. If the bargain looks that good you can always come back the next day with your cards.

Don't: be deterred from taking back items which you think are faulty. Your legal rights are not cut along with the price and warnings in shops stating that that you cannot get a refund on sale goods do not apply to shoddy products.

Do: not be afraid to take that chair back if it falls apart when you sit on it - unless of course it was advertised as a purely decorative item.

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