Do retailers mark up prices to offer deep discounts?


Ethics and PricingPeople feel better when they think they are getting a great bargain when they shop. Knowing this, some retailers markup items above the traditional retail price and then offer a 60 percent discount. If they had simply discounted the normal retail price by 20 percent, the resulting sale price would have been the same. One retailer says that he is just making shoppers happy that they got a great deal when he inflates the retail price before discounting.Significantly marking up prices in order to offer deep discounts is not an unethical pricing practice per se, but it may be considered misleading advertising. The retailer is not really reducing its profits as a result of offering the sale price, even though a 60 percent discount implies a financial sacrifice on the part of the retailer for the benefit of the customer.The situation described above could, perhaps, be considered a sales promotion that uses deception or manipulation. As a consumer think of a place you like to shop at because of the so-called great bargains, coupons, cash back and or discounts they offer.From your shopping experience explain if the discounts you received on your purchase you feel was a bargain deal or do you feel you overpaid.Did you believe the retailer is sacrificing revenue for you the consumers benefit?Why or Why not? Do you find their sales practices to be ethical and beneficial to the consumer or perhaps unethical and misleading?The requirements below must be met for your paper to be accepted and graded:Write between 500 750 words (approximately 2 3 pages) using Microsoft Word.Attempt APA style, see example below.Use font size 12 and 1 margins.Include cover page and reference page.At least 60% of your paper must be original content/writing.No more than 40% of your content/information may come from references.Use at least two references from outside the course material, preferably from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must be identified in the paper and listed on a reference page.Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must come from sources such as, scholarly journals found in EBSCOhost, online newspapers such as The Wall Street Journal, government websites, etc. Sources such as Wikis, Yahoo Answers, eHow, etc. are not acceptable.A detailed explanation of how to cite a source using APA can be found here (link).Download an examplehere


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Retail businesses use various techniques to attract and retain customers. One such tactic is offering discounts, coupons, and cashback offers to shoppers, luring them into making purchases. While it’s a common knowledge that retailers mark up the pricing of products to offer discounts, is it an ethical practice?

In this paper, we’ll explore the ethics of pricing and how retailers’ sales promotion could be considered as a deceptive and manipulative practice. We’ll discuss how retailers markup items to offer deep discounts, and how consumers may perceive it as a bargain deal or feel they have overpaid.


Ethics and Pricing

Retailers are always seeking ways to maximize profit and retain customers. One effective method is by offering discounts that make shoppers feel they are getting a good deal. However, in reality, retailers increase the original price of the product to offer deep discounts, which may be considered a misleading advertising practice.

One retailer claims that by inflating the retail price before discounting, shoppers feel happy that they got a great deal. But, should the consumer be okay with paying an increased price for an item to feel they’re getting a discount? This situation raises the question – Is it an ethical practice for retailers to significantly mark up prices to offer deep discounts?

As a shopper, it is imperative to determine whether we believe we’re getting a good deal or overpaying. Is it reasonable to assume that the retailer is sacrificing its revenue for us as consumers? This paper aims to discuss these important questions about the ethics of pricing in retail businesses.

Retail sales practices must be ethical and benefit consumers. Therefore, it’s crucial to consider the impact of markup prices, discounts, and coupons, and their ethical implications. It’s important that retailers are transparent about their pricing and that shoppers are not misled into believing they’re getting a bargain when they may have no such advantage.

In this paper, we’ll explore the ethics of pricing, sales promotion practices, and their impact on consumers. Further, we’ll examine whether retailers should be sacrificing profits for advertising their products.

Heading 1: Background of pricing tactics in retail businesses

Heading 2: Ethics of pricing and sales practices

Heading 3: Making purchasing decisions – Discount or Overpaid

Heading 4: Deception and manipulation through sales promotion practices

Heading 5: Should retailers sacrifice profits for advertising their products?

– To understand the concept of pricing in relation to sales promotion and deceptive advertising.
– To evaluate the ethical implications of inflating prices in order to offer discounts.
– To analyze the impact of sales practices on consumers’ shopping experience.

Learning Outcomes:
By the end of this paper, the reader will be able to:
– Explain the difference between ethical and unethical pricing practices.
– Analyze the impact of sales practices on consumers’ perceptions of value.
– Critically evaluate the use of deep discounts and promotions in relation to pricing strategies.
– Develop a broader understanding of the ethical implications of marketing practices.

Ethics and Pricing: Analyzing the Impact of Sales Practices on Consumers’ Shopping Experience


As consumers, we all love a good bargain, and retailers are all too happy to provide us with discounts, coupons, and other promotions to help us feel like we’re getting a good deal. However, not all sales practices are created equal, and some retailers use deceptive tactics to inflate prices before offering discounts. In this paper, we will explore the ethical implications of such practices, and analyze the impact they have on consumers’ shopping experience.

Deceptive Advertising and Sales Promotion:

One of the most common tactics retailers use to make shoppers feel like they’re getting a great deal is to inflate the price of an item before offering a discount. For example, a retailer might markup an item by 60% before offering a 60% discount, leading consumers to believe they’re getting the item for 40% off the original price. However, if the retailer simply offered a 20% discount off the normal retail price, the sale price would be the same.

While this tactic is not inherently unethical, it can be considered deceptive advertising. By inflating prices and then offering a deep discount, the retailer is not actually sacrificing revenue, even though consumers may believe otherwise.

Consumer Perception of Value:

As consumers, we rely on our perceptions of value to make purchasing decisions. If we feel like we’re getting a great deal, we’re more likely to make a purchase. However, if we feel like we’re being duped or overcharged, we’re more likely to take our business elsewhere.

In the case of inflated prices and deep discounts, consumers may feel like they’re getting a great deal, but in reality, they may be overpaying for the product. This can have a negative impact on consumer perceptions of the retailer and may ultimately lead to a loss of trust and loyalty.

Ethical Implications:

The use of deceptive pricing tactics can have ethical implications for retailers. On one hand, it can be argued that retailers have a responsibility to their shareholders to maximize profits and that offering deep discounts is a legitimate sales tactic. However, it can also be argued that retailers have a responsibility to act ethically and transparently with their customers and that the use of deceptive advertising is a violation of that responsibility.

Ultimately, the decision to use deceptive pricing tactics is up to the retailer, but it’s important to consider the potential impact on consumer trust and the long-term implications for the brand.


In conclusion, the use of deceptive advertising and sales promotion in the form of inflated prices and deep discounts is a common tactic used by retailers to boost sales and make shoppers feel like they’re getting a great deal. However, there are ethical implications to this tactic, and it can have a negative impact on consumer trust and loyalty. It’s important for retailers to consider the long-term implications of their sales practices and to act ethically and transparently with their customers.

Solution 1:

Retailers’ practice of significantly marking up prices before offering discounts to make shoppers feel as though they are getting a great bargain can be considered a questionable sales promotion strategy. Though the practice may not be an unethical way of pricing products per se, it may suggest misleading advertising. Therefore, retailers engaging in such practices should consider other ethical and effective strategies that do not deceive their customers.

One possible solution is to offer genuine price discounts based on the actual retail price. This approach requires retailers to price their products sensibly, and then offer discounts that are based on the real value of the products rather than inflated prices. Retailers should aim to build long-term relationships with their customers through transparency by providing quality goods at fair prices.

Solution 2:

Retailers that practice remarkably high markup rates before offering discounts to their customers should consider instituting rigorous pricing regulations to avert the tendency to mislead their customers through deceptive advertising. Pricing strategies that enhance the transparency of the actual value of their products can replace the current sales promotion model, ensuring that customers feel safe and empowered to make informed purchase decisions.

Moreover, ethical pricing strategies should focus on ensuring that customers are satisfied in the long term, rather than just getting a deal. By offering high-quality products and exceptional customer service, retailers can gain loyal customers who will continue to come back for their products even when there are no sales promotions. Consistent ethical pricing strategies foster a sense of trust between retailers and their customers, ensuring long-term relationships that benefit both parties.

Suggested Resources/Books:
1. “Fair Pricing: The Ethics of Pricing” by Ellen F. Monk
2. “Marketing Ethics: Cases and Readings” by Patrick E. Murphy and Gene R. Laczniak
3. “Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization” by Andrew Crane and Dirk Matten
4. “The Ethical Executive: Becoming Aware of the Root Causes of Unethical Behavior: 45 Psychological Traps That Every One of Us Falls Prey To” by Robert Hoyk and Paul Hersey

Similar Asked Questions:

1. How do businesses use pricing strategies to deceive customers?
2. What are some ethical pricing practices that companies should follow?
3. Can companies be both ethical and profitable in their pricing strategies?
4. What legal regulations are in place to prevent businesses from engaging in unethical pricing practices?
5. How do consumers determine whether a sale or discount is a genuine bargain or a deceptive sales tactic?

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