Consumers often complain that stores make it seem they are getting a bargain when they really aren't. In New York, state Attorney General Eric Schneiderman said a two-year investigation of Michaels Stores, Inc., provides a case in point.
Schneiderman says his probe showed Michaels engaged in deceptive advertising practices by misleading consumers into thinking they were receiving steep discounts over a two year period. As part of a settlement with the state, the company will change its advertising practices and contribute $1 million in art and craft supplies to public schools throughout New York State, in addition to $800,000 in civil penalties.
"For years, Michaels duped consumers into thinking they were receiving huge discounts, when in fact, they were simply paying the regular store price," said Schneiderman. "Through deceptive advertising practices, this company violated the law and took advantage of hardworking consumers trying to save money. In addition to the civil penalties, the company is paying for their actions by providing $1 million in school supplies for hundreds of school districts statewide."
The price of items in the store, compared to those on the tags, is an issue for at least one Michaels customer.
I picked up a picture that was in front of a $5.00 sign but it had a price tag on it for $9.99,” Renae, Chester, S.C., told ConsumerAffairs.com. “At the register I asked the cashier to make sure it was $5 before I bought it. It scanned for $19.97. Then she scrapped off the $9.99 sign and left after telling me what a great deal that was for $20 because it was originally a $60 picture.”
Michaels is well known as a specialty retailer of arts, crafts, scrapbooking and custom framing. Its 48 stores throughout New York State are frequented by parents, students and teachers to purchase school supplies, Schneiderman said.
As a result of the Attorney General's settlement, Michaels will be required to give back to the public schools in communities which their stores are located. The settlement will benefit as many as 724 school districts throughout the state.
50 percent off...of what?
The investigation began in 2009 when the Attorney General's office began tracking the 50 percent off marketing materials where Michaels advertised its "Custom Framing" as a sale product for at least 104 consecutive weeks. The law prohibits sales that are never ending.
Investigators throughout the state collected newspaper flyers, online flyers, in-store banners and signs advertising the custom framing. Michaels advertised in at least one of these forms every day for two years. The ads stated that custom framing was either at least 50 percent off or a certain dollar amount off.