Claims about Target Sale Prices, Markdown Schedule – Fiction!

Claims about Target Sale Prices, Markdown Schedule – Fiction!

Summary of eRumor:  

Sale stickers at Target can be used to determine whether an sale price will be lowered more in the future, and Target uses a regular weekly schedule to mark down prices in different departments.

The Truth:

 

It’s not true that Target sale stickers reveal whether an item will be marked down more in the future.

And the claim that Target shoppers can expect prices in different departments to be marked down on the same day each week is also false.

The eRumor was first reported in a number of blog posts, and it quickly spread across social media sites. Pinterest users have re-pinned one post in particular millions of times that states:

“EVERY Target shopper NEEDS to know this; if the price ends in 8, it will be marked down again. If it ends in a 4, it’s the lowest it will be.

Target’s mark down schedule –

Monday: Kids’ Clothing, Stationary (office supplies, gift wrap), Electronics

Tuesday: Women’s Clothing and Domestics

Wednesday: Men’s Clothing, Toys, Health and Beauty

Thursday: Lingerie, Shoes, Housewares

Friday: Cosmetics

This is maybe the best pin EVER”

That would help shoppers determine when to purchase products at the lowest possible price — but that’s not how the retailer’s sales pricing system works. Evan Lapiska, a senior public relations specialist at Target, explained to TruthorFiction.com in an email:

“At Target, we use a number of different factors to determine the price for an item. The ending digit of a clearance price is determined by several factors including the original retail price and the applied percentage discount. It is not possible to determine the final markdown or timing of the price change from the item’s current price.”

Advanced inventory systems enable retailers like Target and their vendors to track product margins and price points in real time to determine prices. The retailer uses a system called the retail inventory accounting method (RIM) to set regular product prices and sale prices, Target reports:

“Under RIM, inventory cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value inventory. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market because permanent markdowns are currently taken as a reduction of the retail value of inventory.”

Target offers various types of promotions and sales, and each type serves a different purpose for the retailer. Simply understanding the differences between each promotion may help shoppers make more informed decisions. According Target’s investor relations department:

“The price reduction on items labeled ‘Sale’ or ‘Temporary Price Cut’ is for a limited time only. The price reduction on items labeled ‘Price Cut’ is permanent. The price reduction on ‘Clearance’ items is also permanent; in addition, these items are usually being discontinued, and the price reduction is valid only as supplies last.”

The eRumor only makes claims about the prices of clearance items. Since clearance items are often being discontinued, the amount of inventory on hand should be able to help shoppers determine how long a clearance sale will last, and whether the price could be lowered again in the future.