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Department store found raising prices before sales (Video and News Article)
In a recent investigation done by the ‘Problem Solvers Team’ in Portland, Kohl’s Department Store was caught marking up the price of sale items before marking them down. Shockingly, for some items, the price after discount was actually HIGHER than the original price!
Firms often use sales promotion to attract customers. However, making false claims and giving customers the ILLUSION that they are getting the best price for a product is highly unethical. In fact, this is trickery at its best!
Stakeholder Theory, a fundamental component of Business Ethics, indicates that the interests of all stakeholders, including consumers, should be considered when a firm is doing business. In this investigation, Kohl’s seemingly exalted its desire for profits above the interests of its consumers. In light of this, Kohl’s reputation and future profits could be adversely affected as many of its customers may lose trust in the firm and boycott its products.
In all fairness, Kohl’s indicated that increased material costs contributed significantly to increased prices. We can only hope that this explanation is true. However, businesses must ensure that core values, such as honesty and integrity, govern the way that they do business.