7 retail pricing secrets revealed

Retail prices can be confusing. What does "list price" mean if nothing ever actually sells at list? When is a sale a genuine deal? Money Magazine explains why things cost what they do - and how to use that knowledge to get a better deal.

Lesson 4: Sometimes a 'sale' isn't a sale
Lesson 4: Sometimes a 'sale' isn't a sale
You've no doubt seen an ad like this: "Was $175, is $100!" A study published last year in the Journal of Marketing found that this tactic - called reference-price advertising - succeeds in making shoppers feel like they are getting a deal. Maybe you are, maybe you aren't.

Many states require products to be at the higher "reference" price for a certain minimum period to prevent deceptive advertising, but stores get around this by marking them up for the shortest time necessary. Or by rotating them.

"Say a retailer has eight models of mattresses, and consumers can't clearly tell one from another," says Donald Lichtenstein, professor of marketing at the University of Colorado. "The store can put each one at the lower 'sale' price for an eighth of the year." The retailer doesn't intend to sell any at the reference price, and research shows that they rarely do. This is why it's important to know MAP - so that you know when you're getting a deal and when you're getting bamboozled.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.