How to Tell If a Sale Is Real: The Tricks Retailers Use with Markdowns

The Reference Price Problem

Almost every retail discount works by establishing a reference price — the "original" or "was" price — that makes the current price look attractively reduced. The problem is that reference prices are largely unregulated in their application and frequently manipulated. Understanding how this works is essential to evaluating whether a sale is genuine.

A genuine reference price reflects what the item actually sold for, at that retailer, for a meaningful period before the sale. A manufactured reference price is set artificially high specifically so that the sale price appears to be a larger discount than it really is. The difference, to the customer looking at the price tag, is invisible.

Reference Price Inflation: The Core Technique

The most common tactic is straightforward: set the item's price high, leave it there long enough to qualify as the "original" price under applicable guidelines, then discount it. The item may never have sold at the original price — it may have been priced specifically to be discounted.

In practice, this means an item listed at $200 for two weeks, then sold at $120 "30% off," may effectively always have been a $120 product. The $200 price point existed solely to establish the reference, not because anyone was ever expected to pay it.

Retailers use this technique with particular frequency on slower-moving inventory, where the inflated price is unlikely to put off buyers who were not going to buy at any price — and where the subsequent discount creates urgency among bargain hunters.

The "Was/Now" Deception

The "was/now" display format is the standard vehicle for reference price inflation. Regulations in most markets require that the "was" price reflect a genuine prior selling price, but the definitions of "genuine" and the enforcement mechanisms are weak in practice.

In the UK, the Competition and Markets Authority (CMA) guidelines require that a reference price must be the most recent price at which the product was offered for at least 30 consecutive days. However, these are guidance-based principles rather than strictly enforced laws, and compliance is inconsistent across the industry.

In the US, the Federal Trade Commission's Deceptive Pricing Guides require that reference prices be "bona fide" — meaning the item was actually offered at that price in good faith — but enforcement actions are relatively rare and typically reserved for the most egregious cases.

The practical effect is that consumers should treat "was" prices with significant scepticism and seek independent price history data wherever possible.

Black Friday: The Case Study

Black Friday has become the most documented example of systematic reference price manipulation. Multiple consumer organisations — including Which? in the UK and Consumer Reports in the US — have tracked Black Friday prices from months before the sale through the event itself and found that a significant proportion of "deals" are not cheaper than the same items' prices in the weeks surrounding the event.

Which?'s 2022 Black Friday analysis found that 98% of the "deals" they tracked were available at the same price or cheaper at other times of the year. The mechanism is precisely what the guidelines describe: prices are raised in the weeks before Black Friday to establish a higher reference price, then "discounted" to an amount that may actually represent the item's ordinary selling price.

This does not mean there are no genuine deals on Black Friday — there are. But the signal-to-noise ratio is extremely low, and the time pressure created by the event actively discourages the careful price-history research that would reveal which deals are real.

How to Check Historical Prices

For Amazon purchases, CamelCamelCamel (camelcamelcamel.com) provides complete price history charts for virtually every product sold on the platform. Paste the product URL and you will see a graph of the price over months or years. This makes it immediately visible whether the current "sale" price is actually lower than the item's historical average or whether it is the ordinary price with a manufactured reference above it.

For other retailers, browser extensions such as Honey and PriceSpy aggregate price history across multiple stores. These tools do not cover every product on every site, but for electronics, appliances, and popular consumer goods, they provide enough price history to evaluate most sale claims.

The most useful question is not "how much am I saving from the reference price?" but "is the current price lower than what this item has typically cost over the last three to six months?" If yes, it may be a genuine deal. If not, the discount is manufactured.

Sale Fatigue: When Everything Is Always on Sale

Many retailers — particularly in fashion, home goods, and bedding — operate in a state of permanent or near-permanent sale. When a store is running a "clearance event" 40 weeks a year, the sale price is effectively the regular price. Consumers who shop frequently at these retailers learn this quickly and stop attaching any meaning to the sale labels.

Retailers use this model because the psychological effect of "sale" framing is so powerful that it increases purchase rates even when consumers intellectually know the sale is not genuine. Research on anchoring and reference prices shows the effect is partially automatic — seeing the crossed-out original price activates comparison processes even when the viewer is sceptical.

The implication for shoppers: treat any retailer that appears to be always on sale as if prices are fixed, and evaluate whether the "sale" price is a good price on its own terms.

A Practical Checklist for Evaluating a Deal

Check the price history. Use CamelCamelCamel for Amazon or a price comparison extension for other sites. If the price has been at or below the "sale" price in the last 90 days, the discount is not meaningful.

Search the same item across retailers. A genuine deal at one retailer is often not available elsewhere. An item that is "20% off" at one store but full price everywhere else may actually be priced higher than its market rate before the discount.

Ignore time pressure. "Ends tonight" and "only 5 left" are often accurate in the narrow technical sense (the sale literally ends and restarts) but misleading in intent. If you need to think about it, take the time.

Calculate the actual price, not the saving. A discount calculator helps by showing the final price clearly. Retailers prefer you focus on the saving figure because savings feel like gains; the actual price is just a cost. Reversing that framing — evaluating what you're paying rather than what you're saving — leads to better purchase decisions.