A national retail chain has signs saying 'Sale! 50% off our regular price!' and never sold any merchandise at its regular price. This is an example of ______.

• A. Deceptive reference pricing
• B. Comparative pricing
• C. Price discrimination
• D. Bait-and-switch

Answer: (A)

Deceptive reference pricing is when a retailer presents a “regular price” as a baseline to imply a discount, even though that regular price was never actually charged. In this scenario, the signs say “Sale! 50% off our regular price!” but the store has never sold any merchandise at that regular price. The discount looks real, but the reference price is fake, which misleads consumers about how good the deal is. This kind of misrepresentation falls under deceptive advertising and is typically against truth-in-advertising rules.

Compared to other concepts, this isn’t about comparing prices to a competitor’s price or about charging different customers different amounts (price discrimination). It also isn’t bait-and-switch, since there isn’t a switch to a different, higher-priced item after luring customers with a fake sale.