How to Spot a Fake Discount in 2026 A fake discount is a sale claim built on a false or misleading reference price. A shirt at Macy’s was tagged 40% off a stated original price of $149, yet the lower original price visible behind the sale sticker meant 40% off should have landed at $65, not $89. That July 2026 report by InvestigateTV and Consumers’ Checkbook put a simple shopping question back in the spotlight: when is a “sale” actually a real markdown? The stakes are bigger than one shirt. Allen Hile, identified in that report as a former FTC deputy director, said both inflating an original price before a sale and advertising a fake list price violate the FTC Act. The same report also said the FTC has not enforced its deceptive-pricing guides in more than 40 years and, since 2021, cannot get money back for consumers in these cases. That gap is why states, class actions, and internal pricing controls now matter so much. Here’s how reference-price tricks work under 16 CFR Part 233 , how to verify whether a sale price was ever real, what newer state laws on surveillance pricing change, and how a small business can audit its own pricing pages to avoid creating liability by accident. What counts as a real markdown under FTC reference-price rules? A reference price is the “was,” “original,” or “regular” price shown next to a sale price. Under the FTC’s Guides Against Deceptive Pricing, a comparison price is supposed to reflect the actual, bona fide price at which the article was openly and actively offered for sale for a reasonably substantial period of time. A price shown only for a day or two is not a real anchor for a markdown. The rule sits in 16 CFR Part 233 , often called the Guides Against Deceptive Pricing. The core idea is simple: a retailer cannot create a fake higher price just to make the current price look like a bargain. That matters because shoppers do quick math. If the “regular” price is false, the percentage off is false too, even if the checkout price feels plausible. As Allen Hile told InvestigateTV and Consumers’ Checkbook , both raising an original price right before a sale and advertising a fake list price violate the FTC Act. The legal language is old, but the shopping pattern is current. Why “offered for a day or two” does not qualify The FTC standard turns on whether the higher price was real in the market, not whether it briefly appeared on a tag. If a store posts a sweater at $120 for two days, sells none at that price, then advertises it at $72 as “40% off,” the $120 anchor has not done the work a true regular price is supposed to do. Think of the higher price as evidence, not decoration. A real regular price is one shoppers actually had a fair chance to pay over a meaningful stretch of time. How do fake “was” prices and MSRP inflation work? Most deceptive discounting falls into two buckets: an invented prior price and an inflated comparison point such as MSRP . In both cases, the shopper’s brain focuses on the gap between two numbers, and the retailer controls both numbers on the sign. The first tactic is the shrinking-then-restoring “was” price. A product appears at one regular price, the seller raises that regular price, then announces a sale from the newly inflated number. The second tactic is MSRP inflation. MSRP means manufacturer’s suggested retail price, but that figure is only useful if it reflects a genuine market benchmark. If almost nobody sells near that price, using it as the comparison can turn a routine price into a fake bargain. The Macy’s shirt as a worked example Take the reported Macy’s shirt example step by step. The sign said 40% off $149, which implies a sale price of $89.40, commonly rounded to $89. But the original price visible under the sticker appeared lower than $149. Investigators reported that, based on that lower original price, 40% off should have produced a price of $65 instead of the listed $89. That is the teaching point. The issue is not whether $89 is expensive or cheap for a shirt; it is whether the store used a false starting number to create the appearance of a larger discount. Macy’s response, according to the reporting, was that stores “often offer different limited-time sales events.” That answer does not resolve the central question under the FTC framework: was the reference price bona fide, and was it used for a reasonably substantial period rather than for a moment that existed mainly to support the later sale claim? An SME pricing-page comparison that catches risk fast For a small retailer, the safest way to read a sale page is to compare the claim on the page with the price history in the store system. If the banner says “25% off $240” but the product has sold at $180 for six of the last eight weeks, the liability issue is not the discount size. It is the mismatch bet
