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Nader Rader's Guideline Against Deceptive Advertising

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With the rapid growth of the retail industry came the increase of discount advertising marketing strategies. Discount marketing strategies, often referred to as anchor pricing, rely heavily on the psyche of the consumer. The theory explains the “human tendency to cast disproportionate weight on the first piece of information [you] receive when making subsequent decisions” (Friedman, 934). The initial information is viewed as the “anchor”, and in discount advertising the “anchor” is the original price. Companies anchor a sale price to a “former price” to drive consumers to purchase. With the overabundance of retailers, advertisements, and marketing touch points the profitable strategy has flourished. The success of the marketing strategy has prevailed but the regulation of fictitious tactics has diminished. Are consumers certain their products were ever sold at the “former price”? The Federal Trade Commission (FTC) developed the Guideline Against Deceptive Advertising in 1958. These guidelines distinguish what constitutes a price comparison, former price, and a “true bargain”. Section 233.1 of the Guideline Against Deceptive Advertising explains lawful former-price comparisons. The guide defines a …show more content…

The influence of the students was so strong President Nixon asked the American Bar Association to analyze the FTC and suggest changes. In the 1969 report, the act of “deceptive-pricing enforcement” by the FTC was concluded to “waste resources”. Members of the committee did not oppose the theory. Once President Nixon received the report “he charged the FTC to initiate a new era of vigorous action to protect the consumer” (Friedman, 942). The committee was totally restructured and their primary focus shifted gears. From this day on the federal government seized the regulation of fictitious pricing. Although, states still continue to see cases of false-pricing

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