We've all seen those third-party websites where a pair of heels with an original price tag of $1,475 is marked down to $1,099. What a deal!
The question is, where did they get that original price from? Merchandise can carry various price tags depending on where the item is sold and whether it was on sale, making an apples-to-apples comparison unreliable.
Known as reference pricing, this practice has been the subject of scrutiny, and is something Scafidi said she expects to be examined by the FTC. As is the case with outlets, she said the best way for brands to avoid consumer confusion—and potential legal repercussions—is by being transparent with consumers.
She pointed to flash sale site Gilt Groupe as an example. It provides shoppers with an in-depth explanation as to how it determines the slash-through price. At the end of the explainer, Gilt cautions that "Nothing can replace your own comparison shopping," and "if this is an important factor for you in your purchasing decision, we recommend you conduct your own individual search as well."