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An examination of reference prices at factory outlet stores

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Abstract:

The purposes of this research study were to (1) examine the use of reference prices by one segment of retailing - factory outlet stores and (2) explore related public policy considerations. The researchers found that there was a significant difference between advertised reference prices at factory outlet stores and the regular retail price found in department or specialty stores in the same market. Advertised reference prices in outlets were significantly higher - a 6.2 percent difference. For only two of the product categories studied were differences not significant - housewares and children's apparel. Since these comparative reference prices are not in line with the regular prices at traditional stores, there is a potential for deceptive price claims.

Keywords: Deceptive pricing practices; factory outlet stores; price comparisons; public policy; reference pricing

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/0959396032000099079

Affiliations: Department of Retailing, University of South Carolina, Columbia, SC 29208, USA

Publication date: April 1, 2003

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