Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, June 2, 1993 TAG: 9306020031
SECTION: BUSINESS PAGE: C6 EDITION: METRO
SOURCE: Sandra Kelly
DATELINE: LENGTH: Medium
Or, $549.99, but offered at $399.99, according to Montgomery Ward's promotion?
Or $399.95, without any discounting, as advertising for Grand Piano & Furniture Co. and Schewel Furniture Co. states?
The chairs are comparable according to the manufacturer, La-Z-Boy Chair Co., and were featured in newspaper advertising, flyers and catalogs all distributed during May.
Two of the retailers, Hecht's and Montgomery Ward's, referred to a "regular" price, suggesting their advertised prices were bargains.
This advertising technique has been disappearing since a new state law took effect last July. That's because companies must have documentation that the comparison is accurate.
The only way a former, or regular, price can be advertised is if the claim meets one of four criteria:
The former or regular price is the cost at or above which a substantial number of sales were made in the recent regular course of business.
The former or regular price was offered for a reasonable period of time in the recent, regular course of business, not the price put on an item on "Monday evening when nobody buys," according to a state consumer official.
The price is based on a markup that does not exceed the supplier's cost plus the usual and customary markup used recently by the supplier in the actual sales of goods of the same kind, quality or quantity.
The date on which the item was offered or sold at the former price is advertised in a clear and conspicuous manner.
Basically, this means: If you can't prove it, don't say it.
For our comparison, workers in four area retail stores provided model numbers of the La-Z-Boy recliners featured in recent ads; and Otto Smoktonowicz, national merchandise manager for the Monroe, Miss., manufacturer, said those chairs were comparable in value.
Did Montgomery Ward ever offer the chair at $549?
"Every now and then for a few days and sometimes as long as week" the chair is offered at the higher price, said a salesperson contacted by telephone at the Roanoke store. Corporate officials promised to explain their policies, but never supplied the information.
The local salesman also said he didn't think any chair ever sold at the higher price.
Has Hecht's sold the chair at $700?
"It's marked at $700 right now," said a salesperson at Hecht's home furnishings store in the Richmond area. (It doesn't sell La-Z-Boys in its Roanoke store).
The worker said the chair will stay at the higher price for three days and then go back on sale for the weekend.
Attempts to speak to corporate officials at Hecht's about the company's advertising policies were unsuccessful.
Andy Hantwerker, manager of Virginia's Division of Consumer Affairs' Office of Investigations, won't say which companies he has contacted for violating the Comparative Price Advertising Act.
He said the department is trying to educate retailers and get them to comply voluntarily.
The Department of Agriculture and Consumer Services initially sent letters and a copy of the law to furniture retailers. About 1,000 letters now are going to jewelers.
The state also reviews advertising for compliance.
Hantwerker said some retailers have quit using comparison advertising after a warning. However, he said his office is investigating about 10 cases involving retailers of furniture, general merchandise, jewelry and furs.
He would not identify the companies his office is investigating except that some "have many, many stores throughout the commonwealth."
Hantwerker said his office acts on consumer complaints as well as its own observations of advertising.
If Hantwerker's office can't get a retailer to change its advertising, it can refer the case to the state attorney general, a commonwealth's attorney or an attorney for a city, town or county for legal action.
An unsubstantiated ad could cost a company as much as $1,000 per violation, plus court costs and investigative fees.
A form letter to merchants points out:
"If a one-page newspaper ad contained 10 items using comparison prices and none of these comparisons complied with this law, this one-page ad could constitute 10 violations."
The best protection against misleading advertising is for a consumer to "price what an item can be bought for at one place against what others are selling it for," he said
Forget "prior prices" and "former prices," he said, and ask those stores that advertise that way to put their proof on the table.
by CNB