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Why JCPenny's New Pricing Policy May Not Be As Great As It Seems

By (view all posts by pmiller)
at 4:15PM Thursday January 26, 2012
under Newsworthy

After JCPenny announced its new pricing scheme, many financial sites portrayed the new policy as manna from heaven. If you judged by the headlines alone, you'd think that JCPenny was now selling everything for 40% less than suggested retail, no questions asked.

Photo courtesy of Mike Kalasnik, via Flickr.

As is often the case, the reality is more complex. Read on to find out what the new policy means, and what it means for you.

Let's start with what the policy isn't. Despite some of the reports you may have read, JCPenny is not doing away with all sales. Instead, JCPenny is lowering the prices for all of its merchandise an average of 40%. They are also doing away with most sales, not all. There will still be weekly and monthly discounts on certain items, and these will be designated by special tags.
And, contrary to some articles, JCPenny is not quite emulating Wal-Mart's "everyday low price" strategy, either. The purpose of the change is to make the shopping experience more predictable, not necessarily cheaper. The idea is that most shoppers find fluctuating sale cycles confusing and frustrating.

For savvy shoppers, this policy change may in fact be a bad thing. For one reason, that 40% discount has nothing to do with the suggested retail price, or the price offered by competitors. JCPenny's merchandise will be 40% less than their own prices from the previous year. Those prices were made artificially high to compensate for regular discounts and clearance sales, so it stands to reason that the average shopper is going to do no better or worse than before the policy change.

The real trouble with this policy is that it appears as though there will no longer be coupon codes and flash sales. As any DealPro will tell you, one of the best ways to save is to combine discounts. Previously, it was possible to wait for an item to go on sale, to have a clearance price, or to be offered with free shipping. This was the time to combine that discount with a coupon code and get it for even less. While it's true that this new system might benefit shoppers who have no interest in timing when they buy, it remains to be seen whether or not it will benefit those of us willing to do a little homework.

In any case, this policy change shouldn't necessarily change the way you shop. As always, it's best to compare prices on multiple sites before you decide to buy. Sometimes JCPenny will be the cheapest place to get something. Often, it will not. Just don't let that "40% off" fool you.

Have your own thoughts about the new JCPenny pricing policy? Please share in the comments.