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Comment by jordan0day | Hacker News Reader

Yeah, I remember a few years back when a lot of businesses were going out of business reading online accounts of these tactics.

One that especially sticks out is when the Circuit City chain went under. I remember reading about how they brought in an outside company to handle the sales, and the first order of business was to raise all the prices on everything in the store. DVDs that they couldn't sale at $10 were suddenly flying off the shelves at $20 (don't remember the exact numbers).

It makes you realize what a fine line (which each person has to draw for themself) there is between clever marketing and slimy, manipulative tactics.

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This practice is an interesting play on expectations; namely, that a fire sale implies deep discounts on goods. It is similar to the tactic used at Black Friday at just about every major retailer: have a few major loss-leaders in your ad, and discreetly mark up everything else in the store.

Is this manipulative? I wouldn't call it that, at least not more than any other retail tactic. Consumers have more price information available to them than ever before, yet they are still amazingly susceptible to the idea that they are getting a good deal, nevermind that the widget that they are saving 25% on costs half as much on Amazon. If using psychology as a sales tool is unethical, then the idea of advertisement and "sales" must be as well.

Free markets are only efficient if consumers act rationally. In addition to being unethical, manipulative marketing is bad for the economy. It's in everyone's long term interest to regulate false advertising.

I went into Circuit City during their sale and was not at all surprised at how expensive everything was. What I was surprised by, though, were the people who were paying those prices in a store that wouldn't be around to provide any service.

This happens at a smaller scale all the time, too. One example that stood out at me was my local grocery store's store-brand salsa (which is surprisingly good). Used to go for $2/bottle. After a while, they bumped the price up to $3/bottle, and then put it "on sale" for $2/bottle. No idea if it increased sales at all, but that "sale" has been a permanent fixture ever since.

People's perception of prices can be really malleable, so it can pay off a lot to have a high price in a location where people will be expecting the price to be better than usual.

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