JCPenney relabeling products with higher prices

We're sorry and please come back.  That's what JCPenney is saying to customers it lost after it dumped coupons and deals in recent years.  But as the retailer tries to revamp its image, we found something else they may need to apologize for.

Stroll around JCPenney and you'll notice many stores have gotten a facelift.  Shiny bright displays catch your eye around every corner.  But you have to look really close to find something else that's new: the prices.

We call what we found sticker shock, because if you pull back the labels attached to many products at Penney's you'll find items have been marked up big time.  By shopping JCPenney locations in Owings Mills, White Marsh and Eastpoint, we discovered items marked up by double the price or even more.

Among the examples we found was a pitcher with a price that had been bumped up by $6.  We found towels doubled in price from $4 to $8, lamps that went up in price by $40 and glasses that jumped from $9 to $20.  It appears the company is ramping up its prices as it revamps its image.  One customer we showed the differences to told us, "That's not nice, that's not good.  If you're going to do anything use your coupons because they're very beneficial."

And that's what Penney's wants you to do.  The company tells ABC it re-ticketed items to protect profits for when you cash in with deals and discounts.  That's the way it used to be at Penney's before the company's leadership decided to get rid of coupons altogether and drop prices. 

The company's profits showed customers hated the move, so the retailer recently shifted back to its old ways.  But customers like Terri Buchacz say the transition is hard to swallow, "I just noticed upstairs in the bedding that a lot of stuff you see $10, then you see a little ticket over it where it's like $14, $15, so of course I put it back."

Buchacz made her decision based on pricing you can see.  But when we took our hidden camera along as we pulled back labels, we also found some of the lower prices underneath the new labels had been blacked out.  When we could determine the lesser price, we specifically asked to pay that cost once we hit the register. 

Every store we visited was willing to honor the price under the label if we pointed it out.  But experts say that's still no way to win back your trust.  Janet Wagner, associate professor of marketing at the University of Maryland and Director of the Center for Excellence in Service, says, "This is just a very poor tactical move on their part."

Wagner thinks JCPenney should have considered selling off its existing inventory with the old pricing instead of relabeling.  She says, "Obviously it damages your reputation even further, but I think it confuses the customer.  What does this company stand for?"

Consumers who notice the new labels may question whether they're truly getting a deal when shopping at JCPenney.  And Wagner believes those who feel the chain has wronged them again will spread the word on social media.  She says, "Probably everyone will go home and talk about it and there's nothing worse than negative word of mouth.  That really damages a company's reputation."

In a statement, JCPenney tells us this pricing model is commonly used in the industry.  Their representative says it gives customers the value they're looking for when they shop at the store.  The pricing changes are not in effect storewide according to JCPenney, although they primarily impact private label brands. 

Statement from JCPenney:  "Last year we created an everyday pricing structure that did not resonate with our core customer. While our prices continue to represent a tremendous value, we now understand that customers are motivated by promotions and prefer to receive discounts through sales and coupons applied at checkout. So we are returning to a pricing model that is commonly used in the industry to give customers the value they are looking for when they shop with us."

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