One wonders how they get away with this stuff.

Just got a Memorial Day sale mailer from a major Department Store. Looked inside and found an add for 25% off Citizen watches. One of the watches is the Skyhawk pictured above.

The flyer claims a "regular" price of $650.00 and with the 25% off it comes to $485.00. I wonder where they get their "regular" prices because the Skyhawk has a suggested list price from the manufacturer of $599.00 - in fact they are shipped with a price tag in that amount. From time to time we put our watches on sale at 20% off which means you would pay $479.00 for a Skyhawk at Chimera Design - six bucks less than the Major Department Store.

Gee whiz - how can my 20% off sale give you a net price that is less than their 25% off sale? Oh, I see now - they mark it up to mark it down and still charge more than we do!

The reason I like to point this kind of thing out to you is my attempt to educate you about the games that are played with prices and discounts. The fact of the matter is that retail stores have to make a certain amount of profit to stay in business. There is nothing wrong with making a profit, but it is wrong to mislead people with artificial prices and discounts which really amount to the Major Department Store (in this case) making more profit than we do - even though it looks like they are discounting the item MORE than we are.

How do they discount jewelry 40 to 70%?

70% off what?
Our business is a couple miles east of a big box chain store. They have a jewelry counter in all their stores and if you observe them you will see that they always have a "sale" on their "fine jewelry" which ranges anywhere from 30% to 70% off. Such discounts beg the question: 70% off of what? Is the customer really "saving" 70% of his or her shopping dollar or is it just another example of boderline deceptive advertising?

This company has a chain of stores in Michigan, Ohio, and Indiana and in the year 2006 they sold over 170 MILLION dollars of jewelry and watches. Do you really think that a company selling that kind of volume can stay in business by discounting their jewelry 70%? You do not need a degree in accounting to realize that the only way a business can consistently sell things with massive "discounts" is to put grossly inflated price tags on the items to begin with.
A huge corporation is not going to be able to meet their overhead (pay employees, taxes, insurance, building maintenence, etc. etc.) by truly discounting 70%. They cannot keep the doors open if they sell you a $1,000.00 pair of diamond earrings for just $300.00. What you are getting is a $300.00 pair of earrings for $300.00. Many times you actually pay too much for the mass produced, shoddy quality jewelry they sell. We regularly turn away business from people who want rings they bought there sized for the simple reason that we do not want to touch the rings - the gold shanks are too thin or the gemstones are not secure in the mountings. We guarantee our repairs and we cannot stand behind any work done on merchandise that was shoddy to begin with.
We had a young lady crying in our showroom because her boyfriend bought her an engagement ring that was a size 7 and she wore a 4.5. We explained that we could not size the ring because of the poor construction - she cried in frustration because she had been told the same thing by 4 other independent jewelery stores.
Don't be fooled by this kind of advertising.

This is how they do it. Consider the disclaimer JC Penney puts in their ads. This is taken from an ad Penney had in the December 16, 2007 issue of the Parade magazine. (Pictured above) It featured jewelry at 40% off and gold jewelry at 60% off. The ad was 4 full pages. The big discounts are given off of "regular" prices and the very small print at the bottom of the ad explains just what regular prices are:
"Percentages off regular prices as shown.
'Regular' prices reflect offering prices which
may not have resulted in actual sales.
Regular prices may not have been
in effect during the past 90 days..."
So Penney admits that the regular prices are prices at which no one has purchased the items and furthermore, the prices may not have even been "in effect" anytime during the last 90 days. The "regular" prices from which the huge discounts are taken are by their own admission meaningless.

Someone I do business with at a diamond wholesaler used to work at a national jewelry chain in a mall store outside Detroit. This chain does similar "sales" with similar discounts. She told me that the night before a big sale began, the employees would stay after hours to re-tag all the sales items with new tags that were shipped in from corporate headquarters.

Macy’s also has disclaimer language when they advertise “50-60% plus 20% off fine jewelry” as they did in a mailer for a May 10 One Day Sale. The bottom of the page states: “See back cover for details.” The back cover contains these words:

“Reg./Orin. prices reflect offering prices in effect during the 90 days before or after this sale event, but not necessarily during the past 30 days. Savings may not be based on actual sales. Some original prices may not have been in effect during the past 90 days.”
They put fabricated prices on the items in order to offer big discounts.

We do not play these games at Chimera. If we have a sale, then we take a discount from our original asking price, not something we just made up.