There's a federal rule for this: a "was" price has to reflect what a store actually, recently charged most of the time — not a number invented to make a markdown look bigger. Multi-week reviews of major retailers have found items marked "on sale" almost constantly, which is the clearest sign a discount isn't what it claims.
Is there an actual rule against fake "sale" prices?
The Federal Trade Commission's rule on this is codified at 16 CFR Part 233, the Guides Against Deceptive Pricing. Under section 233.1, a "former price" used in a sale ad is only legitimate if it was "the actual, bona fide price at which the article was offered to the public on a regular basis for a reasonably substantial period of time." A price a store touched for a day or two before marking it down doesn't qualify. Neither does a price pulled from months in the past without saying so, or one set high purely to make the eventual markdown look bigger. The guide also flags trivial reductions dressed up as bargains — its own example is a cut from $10 to $9.99. Notably, the rule doesn't require the store to have made actual sales at the old price; a price can be real without a single sale closing at it. What it does require is that the number reflect a genuine, good-faith business practice, not a prop set up for the ad.
The same guide covers two related tactics: comparing a sale price to what "other stores charge" (section 233.2) and comparing it to a manufacturer's suggested price (section 233.3). Both are held to the same standard — the comparison price has to reflect what a reasonable number of principal retailers in the area are actually charging, not an inflated suggestion nobody honors.
How often do stores actually get caught doing this?
Often enough that it's been documented directly. A 44-week price-tracking review by the nonprofit Center for the Study of Services, publisher of Consumers' Checkbook, followed pricing on big-ticket items at seven major retailers — Best Buy, Costco, Home Depot, Kohl's, Macy's, Sears, and Target — and found, according to reporting on the study, that "on sale" was for several of them closer to the normal state of the price tag than an exception. Sears was the most extreme case: eight of nine tracked items were on sale almost the entire period, and two of them stayed marked down for all 44 weeks. At Kohl's, eight of nine items were discounted more than half the time, four of them constantly. At Macy's, one item was perpetually on sale and four were discounted 70% of the time or more.
Kevin Brasler, the study's lead researcher, put the mechanism plainly: stores use "the illusion of deep discounts to keep people from shopping around." The point isn't that every sale is fake. It's that a percentage-off sticker tells you nothing on its own about whether that percentage is a real, recent difference or a permanent fixture of the price tag.
What are the red flags on a too-good-to-be-true price?
The FTC's clearest warning here is aimed at ads for brand-name products priced well below what anyone else charges — a familiar sight in a designer-bag "flash sale" or a skincare brand's "clearance" post on social media. The agency's guidance lists several signals worth treating as a stop sign: a price for an expensive item that's never discounted that steeply anywhere else; no visible return policy, warranty, or shipping information; a seller reachable only through the ad itself, with no separate contact information; and, the clearest tell, a checkout that accepts only gift cards, wire transfers, payment apps, or cryptocurrency rather than a credit card. The agency's own framing is blunt: "if expensive brand-name items are offered for bargain prices, they could be counterfeit or stolen."
None of that means every steep markdown is fraudulent. It means the burden of proof rises with the size of the discount and the obscurity of the seller. A 30% cut on a retailer's own site is a different animal than the same discount from an unfamiliar storefront that only exists inside one social post.
How do you actually verify a discount before you buy?
Checking a claimed discount doesn't take long once you know what to look at. A short, repeatable process covers most of it:
- Note the exact product details — brand, model or style number, size, and color — so any comparison is against the same item, not a similar one.
- Check the listing at two or more other retailers that carry the same product, and total the real cost including shipping, handling, and tax, not just the sticker price.
- Read the fine print on the sale listing itself. Terms like "closeout" or "refurbished" signal the item isn't in original condition, and sale items often carry a shorter or different return window than regular-price stock.
- Treat a steep discount on a designer-name item from an unfamiliar seller as a reason to slow down, not speed up — verify the seller's return policy and contact information before paying.
- Remember that prices move. A discount that's genuine today can be gone, or replaced by a different one, within days — that's a reason to check the date on whatever comparison you're relying on, not a reason to rush.
Quick reference: legitimate discount or worth a second look?
| Signal | Points to legitimate | Worth double-checking |
|---|---|---|
| How long the "was" price was offered | Weeks or months at that price before the markdown | A price touched only briefly right before the sale started |
| Return and shipping information | Clearly listed, comparable to the store's standard policy | Missing, vague, or noticeably different for the sale item |
| Seller identity | The brand's own site or an established, well-known retailer | An unfamiliar seller reachable only through the ad itself |
| Payment method requested | Credit card or standard checkout | Gift cards, wire transfer, payment apps, or cryptocurrency only |
Frequently asked questions
Does a store have to have actually sold the item at the old price for the discount to count? No. Federal guidance is explicit that a former price isn't automatically fictitious just because nothing sold at it — but the price still has to reflect a genuine, good-faith business practice offered regularly for a substantial period, not a number invented right before the markdown.
What does it mean when a sale listing says "closeout" or "refurbished"? Those labels are a signal, not marketing flavor. Federal shopping guidance notes both terms typically mean the item isn't in original, first-quality condition, which is worth checking before you buy since sale items in that condition often carry a different return policy than regular stock.
Is a deep discount on a designer item ever legitimate? Yes, but the size of the discount changes how much verification it deserves. A steep markdown from the brand's own site or an established retailer is common; the same discount from an unfamiliar seller reachable only through a social media ad is the exact pattern regulators warn shoppers to check twice.
For more coverage, see Miami Swim Week 2024 Powered By Art Hearts Fashion.
For more context, read How to tell if that “was” price is actually real — Value.