A second rate retail chain with a lot of consumer complaints. Corporate Headquarters, Kohl's Department Stores, N56 W17000 Ridgewood Drive, Menomonee Falls, WI 53051. Phone: (262) 703-7000. In 2012 a consumer investigation by CBS News discovered that Kohl's had engaged in the practice of marking up products in the weeks before a sale in order to make products appear as if they were being sold at discounted prices and artificially inflating the amount of the price mark-down. Full story below.
Msg
Saturday, November 7, 2015
8/6/15
Are Kohl's and T.J. Maxx Being Honest About Pricing?
Consumers flock to Kohl's (KSS) and TJX's (TJX) T.J. Maxx, expecting deep markdowns on apparel and other department store staples.
They may not be getting the bargains that they think they're getting.
Both retailers are being sued in different lawsuits, alleging that the discounts being promoted on price tags are deceptive. Anyone shopping at Kohl's or T.J. Maxx knows the drill. Items appear to be on sale, referring to higher original or "compare at" prices. It helps justify or validate the purchase, and the argument here is that publishing these higher prices works on the psychology of the shopper. A fashionable $30 spring dress may seem like a good deal, but when the price tag claims that it's selling elsewhere for $50, it may seem outright irresistible at a 40 percent discount.
It's not right, and now legal fisticuffs are flying. Mad Maxx The first federal class action lawsuit was filed on July 17 in California. A pair of shoppers filed the suit, claiming that placing dubious "compare at" prices constitutes deceptive advertising. The lawsuit is specifically trying to compensate shoppers from California who have made purchases at T.J. Maxx over the past four years, but if it sticks, you know that more will follow. Timing Your Spending
T.J. Maxx explains on its website that the "compare at" price promoted on its price tag is based on its "buying staff's estimate of the regular, retail price at which a comparable item in finer catalogs, specialty or department stores may have been sold."
It then goes on to clarify that it buys products from thousands of vendors, so the actual item being sold may not be offered by other retailers at the "compare at" price that it's broadcasting. It then encourages customers to do their own comparison shopping as another way to see the "great value" that it's offering.
However, if customers are buying a pair of cargo shorts for $22 on the premise of a "compare at" price of $33 when there's no one really selling the same item at $33, is the 33 percent discount real? Lumps of Kohl's Four days after the class action lawsuit was filed against T.J. Maxx, a somewhat similar claim was made against Kohl's. Two different California shoppers kicked off the fireworks at the popular department store chain, voicing concerns that it, too, is inflating the value of its bargains.
This is a particularly thorny issue at Kohl's. The allegations claim that price tags offering higher "original" or "regular" prices on its own brands -- including Croft & Barrow and Apt. 9 -- are disingenuous if they were never offered at those higher prices. They are in-house brands, so it's not as if they are being sold elsewhere.
It's easy to shake our heads when folks initiate class action lawsuits, but there is some meat to these allegations. We'll see how it plays out, and ultimately T.J. Maxx and Kohl's may have to change their labeling practices. A good deal is still a good deal, and hopefully consumers will see it that way without having to be swayed by potentially dubious "original" or "compare at" pricing.
Is it fair to consumers when a retailer sells their own private-label products at a “discount” from the prices that they set in the first place? Two Kohl’s shoppers in California say that it isn’t, and they’ve filed a federal class action suit alleging that discount department store Kohl’s does exactly that.
The two lead plaintiffs claim that the real problem is with the store’s own brands, which include Sonoma, Apt. 9, Croft & Barrow, Daisy Fuentes, Elle, Mudd, Jennifer Lopez, and Simply Vera. Since Kohl’s owns these brands, the “original price” that they set on any item is arbitrary.
Yet shoppers love discount games, so all a retailer has to do is start us out with the idea that an item is “worth” more than they want to charge for it. If they want to sell a dress for about $24, they could mark the “original” price as $40 with a 40% discount. Easy!
The lead plaintiffs say that’s exactly what is happening every day at Kohl’s. (PDF download) “As a result,” their lawyers write in their initial complaint, “Plaintiffs and members of the proposed Class… received items of lesser value and quality than they expected and Kohl’s unlawfully, inequitable, and otherwise improperly was thereby unjustly enriched and benefited.” In other words, that $24 dress was never worth $40 to anyone.
It’s one thing when an off-price retailer sells clothes from other brands that you could theoretically find in a department store, even if the items bearing fancy brand names that you find in stores like TJ Maxx and Marshalls or in brand outlets are actually produced specifically for the off-price or outlet market.
While Kohl’s does business in the same way nationwide, this class action only applies to California, alleging violations of that state’s false advertising, and unfair competition laws.
The plaintiffs ask that Kohl’s stop tagging items with what they call “false, untrue, and misleading ‘regular’ or ‘original’ prices,” as well as restitution for items that they have bought based on those “false” original prices.
KOHL'S SETTLES CASE WITH SANTA CRUZ CO., OTHER AGENCIES OVER ALLEGED OVERCHARGES
In this Aug. 8, 2011 photo, shoppers enter and exit the Kohl's store in San Rafael, Calif. (AP Photo/Eric Risberg)
Bay City News
SANTA CRUZ, Calif. --
Kohl's Corporation has agreed to pay $958,686.27 to Santa Cruz County and other agencies to settle a complaint alleging the department store charged customers more than the advertised price for some items, the Santa Cruz County District Attorney's Office announced Friday.
Santa Cruz officials sued along with Fresno, Riverside and Shasta counties in a complaint alleging that customers were charged more than prices advertised on store shelves and signs, and that advertisements did not adequately disclose information about the "Kohl's Cash" program.
The case arose from scanner and price inspections by county weights and measures officials.
Kohl's cooperated with investigators and prosecutors and has changed its policies and procedures to make pricing more accurate, officials said.
Kohl's settled the case without admitting wrongdoing.
Consumers in Santa Cruz County who believe they have been overcharged can contact the Santa Cruz County District Attorney's Office at (831) 454-2601 or the Santa Cruz County Department of Weights and Measures at (831) 454-2383.
12/23/14 On Sat. Dec. 20, 2014 I did some online research on a Keurig K45 Elite Coffee Brewer which I found was carried by most retail stores and showed a normal retail price of $149.99. Like most advertised prices, no store carried it at that, but at discounted prices of $119.99 plus various other discounts which varied by store. (Note:The Keurig.com site lists it at $119 w/free shipping, the $149 price is just BS) Macy's had 15% off, Kohl's 20% off etc. Since I wanted to look at the item before buying one I went to the Acworth Kohl's store on Cobb Parkway at 9 p.m. and noted that they had about 50-60 of them on the floor, but no sign of any discount other than the advertised $119.99 price. I took my internet print out to customer non-service and inquired about the price. I was told that I could open a Kohl's charge and get 30% off or I could go home and order it online for delivery to the store then come back and pick it up and get the 20% off. Keep in mind that I am standing right there wanting to make a purchase and the morons are telling me that to get the advertised 20% off I would have to go home, order it online then come back to pick it up and they had probably 60 of them in piles 20 feet away. Of course I had the option of paying the $119.99 sucker price which I was not about to do. So you wonder just how stupid you have to be to work in a Kohl's and turn away customers who want to buy your merchandise. Why they want to give you the run around is unknown, maybe they have sold all they wanted that day and thought that they could just give moronic answers to people and see if they could get them to buy it at the non-discounted price. Didn't work with me. I won't buy ANYTHING at ANY Kohl's store, not a Keurig coffee maker or anything else. I have also decided NOT to buy one at any store as the damn thing is just to expensive for making one cup of over priced coffee.
SACRAMENTO (CBS) – Frequent sales and huge discounts are strategies that have kept many Kohl’s shoppers coming back time and again – but are Kohl’s sale prices always as good as they seem?
A CBS hidden-camera investigation conducted between November 2011 and January 2012 found items marked up as much as $100 from earlier prices, and then put on sale.
Pattie Woody recently came home thinking she got 50 percent off a $209.99 sheet set from Kohl’s.
“It really surprised me,” she said.But inside the packaging, she found another price tag — this one listed at $169.99 — $40 cheaper than the outside sticker.
She still believed she had gotten a good deal, but peeling back three layers of price stickers, she found her sheet set had been marked up three times, she said.
“You always expect to see the price tag stuck on top of another one is the cheaper price,” said Woody. “Actually, it was more expensive.”
CBS hidden cameras went inside several Kohl’s stores, checking the printed price tags of some items currently on sale.
A CBS producer found clothes, luggage, kitchen, bath and bedding products — 15 items in all — marked up. Some of the items were as much as $100 more expensive.
Other items have different price tags on different areas of the product.
One twin sheet set was listed at 50 percent off the original price of $89.99. But inside the plastic zipper, the earlier price tag shows $49.99, indicating the current sale is only $5 savings from the original tag.
A 10″ skillet was listed on sale for $34.99, with a regular price of $39.99, but underneath that sticker, the earlier price tag was marked $29.99 — meaning Kohl’s current price on sale is $5 more than the originally marked price.
Consumer attorney Stuart Talley thinks if Kohl’s is marking up prices to mark them down. If so, thecompany is breaking California State law, which bans companies from “making false or misleading statements” about the “amounts of price reductions.”
“That’s illegal in California,” Talley said. “You just can’t do it.”
When CBS reached out to Kohl’s, the company denied any wrongdoing, saying, “Kohl’s does not raise “off-sale” prices on a short-term basis just for purposes of 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,” the statement said. “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.”
Kohl’s claimed the price of Woody’s sheets went up because of the rising cost of cotton, and admitted the prices on the 15 items a CBS producer found marked up were raised in the late summer or early fall — well before the current sale.
(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Kohl's is a joke. It is beyond me how anybody with half a brain shops there. There is a Kohl's next to my daughter's dance studio so sometimes I'll walk around to kill time and amuse myself by looking at the utterly ridiculous "original" prices. For example, they'll have a package of socks listed at "original" price $25, but "on sale" today for %75 percent off, which really results in a regular price of $6.25, hence no discount at all. Kohl's is such a rip-off.
Jman •
Yawn. Nothing illegal about raising and lowering prices. As consumers, we may not like it, but what store doesn't do this? The reporter infers Kohls is breaking the law but completely fails to describe how. It's only illegal if the price was never at the highest point claimed.
RiverWalk Jman •
The author referenced a consumer attorney Talley who said that "if Kohl’s is marking up prices to mark them down. . .the company is breaking California State law, which bans companies from “making false or misleading statements” about the “amounts of price reductions.” The facts of the story lead one to believe that Kohl's was doing just that.
NN •
I stopped shopping there about year ago. Their customer service reps were horrible against me. The assistant manager accused me of reusing the $10 off coupon. I told her that i had not and asked her to verify with the return clerk. She refused to do so and called security on me. Then, another manager cursed at me a few month later when I told him that his store gave me 3 different answer for the same question. I called and complaint to the store manager and the corp. office but they did not care even with a promise to call me back.
victoria •
I stopped shopping at Kohls five years ago when I noticed their tactics. Everything in the store is marked up by at least 50%. They advertise price reductions but I can always find the same products elsewhere substantially less. Kohls has been doing this for years! Wake up California consumers.
Mollie •
To me it's been obvious for awhile that Kohl's lures its shoppers in with fake "sales". I mean everything is always on "sale" and they hand out those Kohl's Cash things hand over fist. And the quality of their products isn't that great. Occasionally I'll stop in since there is one of the stores in my local mall and I always laugh at the "original price" of things. They're exactly like Mervyn's in my book, poor quality items with designer or celebrity names on them and a ridiculous starting price tag so that they can only sell items once it's been marked on some "amazing" sale price.
Terry Butler •
Kohls has been retagging there jewelry items as well with higher prices with a cheaper sticker under the new higher price sticker. It happened to me a year ago Christmas, I spoke with the manager and he said the same thing Kohls is stating today. I have not shopped at Kohls since. I think it is wrong and believe they are cheating the consumers.
have 1807 complaints closed with BBB in last 3 years
(742 closed in last 12 months)
Complaint Type - Total Closed Complaints
Advertising/Sales Issues210
Billing/Collection Issues577
Delivery Issues238
Guarantee/Warranty Issues14
Problems with Product/Service768
Total BBB Complaints1807
The Better Business Bureau rates this firm as A+ which is of course total crap.
The BBB now puts customer reviews online and here from their Customer Reviews Summary are a few samples of what consumers have to say about Kohl's:
179 Customer Reviews on Kohl's Corporation are now online:
Positive Experience (2 reviews)
Neutral Experience (5 reviews)
Negative Experience (172 reviews)
by Lisa Tolintino on 12/4/2014
Our experience with Kohl's Corporate Office concerning a gift card refund was absolutely awful. It's been two months and Kohl's have failed more than once. How difficult is it to issue a gift card and mail it to the customer? Well, the first time Kohl's mailed the gift card they did not have the apartment number on the envelope, the second time Kohl's send the gift card UPS, but to a completely different state. The employees in the Corporate Office is incompetent and have no interpersonal communication skills. They are rude, over talk you, and don't listen to the customers. I expected more from the Manager when I spoke with her, but she was worst than the employee, and need manager training classes desperately. We missed out on Kohl's Black Friday sale because of their incompetence.
After that, I emailed the President of Kohl's with my complaint, the next day I received a call from their office. The women did not even completely read the email that I sent, by the questions she was asking me. She apologized for the employees failure, but had a lack of concern for the customer. We were very discussed for the way that Kohl's' Corporate Office treated us, and to put salt on the wound they insulted us by a so-call accommodation of a $10.00 gift card, for the 2 months that we have been waiting due to their employees incompetence. What a joke! This experienced has shown us that Kohl's do not care about customer satisfaction.
We will share with our friends and family about this experience and we will NOT patronized Kohl's no longer. Needless to say we will be closing Kohl's credit card immedtiately! We will spend our money where it is appreciated!
I'm at my wits end! I've had 5 issues with Kohl's over the past year, all shipping related. Wrong orders shipped, wrong sizes, hung up on by CS because there were more important customers waiting, you give them an A+, I give them an F... I refuse to call CS anymore, they make promises that they don't follow through with, and you have no proof because it was on a call.... I have pages of emails, and no solutions, they just skirt the issue and hope you give up! Fed up.... and disgusted with the "eh, there's another fool ready to spend their money right behind you" Mentality!
Kohl's falsely advertised a bracelet. They advertised the bracelet as 'sterling silver' with a regular price of $350. Purchased the bracelet for $99 and when I received the bracelet and it clearly says on package and packing slip that it is 'silver plated'. Had to drive to the store just to return it. Customer service was very poor. Will never shop at Kohl's again.
Ordered a trampoline and corresponding ladder from Kohls.com. Ladder arrived, but no trampoline, then I received an email that Kohl's cancelled the order. After an hour on the phone, an associate finally fessed up that they were never in stock. So now I have a ladder for my child for Christmas. They won't replace it with the smaller size which they've now jacked up the price. This is a very shady business, I'm not going back.
You may have been under the impression that Kohl’s, a department store where suggested retail prices are largely imaginary because most of the store is at least 30% off, already was a discount store. Even then, they’re about to experiment with an even more discounted store, joining stores like Nordstrom, Saks, and now Macy’s in opening their own downscale outlet store.
The new Kohl’s store will be about 30,000 square feet, located in New Jersey’s Philadelphia suburbs, and will be called Off Aisle by Kohl’s. That’s about half the size of the smallest existing Kohl’s stores. The chain says it will have returned merchandise from regular Kohl’s stores: they haven’t said this, but we suspect that they’ll also carry items that have sat around other stores for too long.
Kohl’s is a retailer that focuses on middle-class customers, and the American middle class is keeping a firm hand on their wallets recently. Off-price stores like TJ Maxx and Ross, however, have been doing great. While this year so far, the west coast ports slowdown that delayed some fashion shipments and send them to the outlet market has been great for low-end retailers of higher-end merchandise. =====================================================
Kohl's will test off-priced store for returned merchandise
Kohl's Corp. is dipping its toe in the surging off-price retailer stream, with plans to soon begin testing a new store format offering deep discounts on returned merchandise.
The Menomonee Falls-based operator of more than 1,160 department stores nationwide has leased a 30,000-square-foot space in a suburban strip mall in New Jersey that will open early next month as Off-Aisle by Kohl's.
Filling the shelves will be "like-new" clothing, accessories and home goods returned to Kohl's department stores or Kohls.com. Other unspecified merchandise will be added later.
The company wouldn't talk in detail about its strategy, but the move comes amid strong growth for off-price retailers such as TJX Companies Inc. — operator of TJ Maxx and Marshall's — and Ross Stores Inc., as well as for the off-price wing of upscale Nordstrom Inc.
Retailers such as Kohl's that focus on the American middle class, meanwhile, have fared less well.
"Clearly what we're seeing is that given the haves and have-nots bifurcation of the economy, whether it's the consumer in the middle or a retailer in the middle, it can be a very difficult place to be," said Anne Brouwer, senior partner with Chicago-based retail consultant McMillanDoolittle.
Marquette University marketing professor Syed Akhter said much the same thing.
"There is a lot of economic pressure on the middle class right now," he said, "so they are seeking ways to stretch their dollars."
One way, apparently: Hitting the off-price chains.
The three largest retailers in the segment, TJX, Ross and Burlington Stores Inc., will see 6% to 8% growth over the next five years, compared with 4% for the retail industry as a whole, Moody's Investors Service said in a report last September.
Over roughly the last five years, TJX has opened 410 new TJ Maxx and Marshall's stores in the U.S., while Ross has added 237 to its lineup. Kohl's has added 106 stores over the same period.
The two off-price retailers have seen their stock prices soar since 2010, and annual sales rise by about $3 billion for Ross, and more than $7 billion for TJX. Kohl's sales for the period are up about $600 million.
And it's not just the specialists who are profiting from off-price. At Nordstrom, it's the off-price Rack brand that has been driving growth lately.
Four years ago, the Seattle-based chain with the sterling customer-service reputation had 115 full-line Nordstrom department stores and 89 Racks. Today, the full-line count is up by just three, while the number of Racks has doubled, to 178.
And while the glossy full-line Nordstroms have posted negative same-store sales the last two years, the Racks have been solidly in positive territory on the key retailing measure.
Macy's is jumping into the game too. The Cincinnati-based chain, something of a retailing star the last few years, said just two weeks ago that it will open four pilot off-price stores — they'll be called Macy's Backstage — in metropolitan New York.
"It's a segment of the business that a lot of retailers are taking a hard look at now," Brouwer said.
Beyond the economy-driven growth opportunities, off-price tends to be very profitable, she said.
"Operating expenses are much, much lower," Brouwer said. "Your real estate cost is much much lower. Which means you can be generating a much higher profit per square foot."
Kohl's applied last month for a trademark on the phrase "Off Aisle by Kohl's." The firm wouldn't say, however, whether a successful test of the concept might lead to additional off-price stores elsewhere in the country.
"With any test, we don't like to say what we think we might do with it," Jen Johnson, vice president of corporate communications, said Wednesday. "We just want to test it.... We are at the information-gathering stage at what this location will accomplish, and then we'll make decisions."
Johnson said Kohl's foray into off-price isn't comparable with, say, Nordstrom Rack, and reiterated that Off-Aisle by Kohl's is among many ideas the company tests — albeit a highly visible one.
The new store is on a high-traffic street in Cherry Hill, N.J., outside Philadelphia.
Discounts could run as high as 70% to 90%, Johnson said. All sales will be final, with no returns or exchanges allowed.
Kohls clothing is very poor quality for the money and the sizes on their jeans are inconsistent. I gave up and get the brands that I know will fit from Amazon.
I agree. The same brand of jeans can carry the same lable, but may be constructed in two diffrent countries.It is a very frustrating experience when you have to shop for these products.
Kholes has an overabundance of women's clothing. There are just WAY too many brands that are similar in style to each other. The sizing between these brands is inconsistent. In December I found an Apt 9 jacket that looked strikingly similar to a Jennifer Lopez jacket. The deciding factor was fit and price. The Apt 9 jacket fit well, but the Jlo was cheaper by $20. Needless to say, I purchused the Apt 9 jacket and felt a little ripped off. There is just WAY to much of THE SAME THING. Kohls is not my "Go-To" store for clothing. It just too overwhelming. The buying team needs to work more closely, in order to control this repetitive overkill in the ladies fashion area.
At my Kohls locale there are always long racks of Clearance clothing. These racks take up alot of Real estate on the sales floor. Its always great to find a bargin, but these racks are EVERYWHERE!!!! After purchasing a clearance item, I always wonder why the original price was so high. It makes me question my full priced purchases. Am I getting taken advantage of? Also a store that sits on alot of old clearanced merchandise, should be worred about the amount of discounted items they carry. A situation like that could lead to poor profit. OR COULD IT BE THAT KOHLS MAKES PROFIT FROM THAT DISCOUNTED STUFF? It just doesnt seem healthy for a buissnes to pay clerks to deal with this cheap old merchandise. It makes me question the true value of everything I have ever bought from Khols.
Kohls clothing is very poor quality for the money and the sizes on their jeans are inconsistent. I gave up and get the brands that I know will fit from Amazon.
ReplyDeleteI agree. The same brand of jeans can carry the same lable, but may be constructed in two diffrent countries.It is a very frustrating experience when you have to shop for these products.
DeleteKholes has an overabundance of women's clothing. There are just WAY too many brands that are similar in style to each other. The sizing between these brands is inconsistent. In December I found an Apt 9 jacket that looked strikingly similar to a Jennifer Lopez jacket. The deciding factor was fit and price. The Apt 9 jacket fit well, but the Jlo was cheaper by $20. Needless to say, I purchused the Apt 9 jacket and felt a little ripped off. There is just WAY to much of THE SAME THING. Kohls is not my "Go-To" store for clothing. It just too overwhelming. The buying team needs to work more closely, in order to control this repetitive overkill in the ladies fashion area.
ReplyDeleteAt my Kohls locale there are always long racks of Clearance clothing. These racks take up alot of Real estate on the sales floor. Its always great to find a bargin, but these racks are EVERYWHERE!!!! After purchasing a clearance item, I always wonder why the original price was so high. It makes me question my full priced purchases. Am I getting taken advantage of? Also a store that sits on alot of old clearanced merchandise, should be worred about the amount of discounted items they carry. A situation like that could lead to poor profit. OR COULD IT BE THAT KOHLS MAKES PROFIT FROM THAT DISCOUNTED STUFF? It just doesnt seem healthy for a buissnes to pay clerks to deal with this cheap old merchandise. It makes me question the true value of everything I have ever bought from Khols.
ReplyDelete