About those huge discounts

They may not be in reality. Smart Money:

Ads that tout deep discounts – 50%, 60%, even 70% off – have become the norm these days. But some of the companies behind those bold promotions may be doing more than luring bargain hunters: They might be breaking the law.

Several California district attorneys filed a civil lawsuit against Overstock.com last week, claiming that the site deliberately misleads customers about the depth of its discounts. In particular, the lawsuit alleges that the company inflates its reference prices – the “compare at” or list price that’s supposed to tell a shopper how much he or she is saving. The result, they claim, is that consumers may not check for lower prices elsewhere. 

At Kohl's, the small type explains that regular or original prices could be "the former or future offered price for the item or a comparable item by Kohl's or another retailer." (The company did not respond to requests for comment.) Kohl’s settled twice with the Kansas attorney general’s office and the district attorney’s office in Sedgwick County (which includes Wichita), which investigated its pricing practices and determined that sale items were often not available at the reference price for a sufficient period of time. Kohl's paid a total of $500,000 in fines but did not admit any wrongdoing.

There are a handful of strategies for shoppers.

• Ignore the discount and focus instead on how current prices compare to one another, Dworsky says. 
• It's also harder to fudge prices on well-known brands or popular items, like iPads or flat-screen TVs; be more cautious if you're eying a more obscure item, or house brands. 
• Sites like PriceSpider and Dealnews, track how a price or sale compares with previous offers, at that store specifically or across the market. 

Or, you could just do what Overstock president Johnson does: “Personally, if I’m shopping, I do a Google search,” he said.