>“It’s strategy called ‘Price-anchoring.’ It’s pretty common across the board. Now as far as it being against the law or breaking any rules or regulations, it could be considered false and deceptive marketing under the FTC Section 5,” Kelly adds.
Many States call this practice out specifically as an unfair trade practice in their laws as well.
An old state law which for all I know was repealed ages ago or whatever was that an item couldn't be marked as on sale for half the year or more. You couldn't say it was 40% off for 300 days out of 365, that sort of thing. The easy workaround was to make it 40% off for three months, then have it on no sale at all but mark the sale price as the original price for the next three months, and switch back and forth whenever you want. So long as the item wasn't always marked "on sale" you were fine.
I don't think the US has ever had real evidence based tests like that, except in major class action suit which have largely ceased to exist thanks to mandatory arbitration clauses.
The Act prohibits false or misleading representations to the public as to the ordinary selling price of a product, in any form whatsoever. Ordinary selling price is validated in one of two ways: either a substantial volume of the product was sold at that price or higher, within a reasonable amount of time (volume test); or the product was offered for sale, in good faith, for a substantial period of time at that price or a higher price (time test).[0]
[0] http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02...