When you see a sale advertising “40% off” an item, what exactly does that mean? Is it 40% off the price it was selling for last week? 40% off the MSRP? There’s a gray area in retail pricing that has some shoppers accusing Kohl’s of inflating prices so that an “on sale” item looks to be a better deal than it actually is.

CBS Sacramento’s Kurtis Ming — one of the best named consumer reporters in the country — looks at a few instances, including one where a Kohl’s shopper thought she’d got a great deal when she bought a $210 sheet for for 50% off, only to later find a price tag showing the product had recently been selling for $170, and that the price had been marked up three times since until reaching $210.

“You always expect to see the price tag stuck on top of another one is the cheaper price,” she says. “Actually, it was more expensive.”

So CBS sent in hidden camera crews to several Kohl’s outlets to see if this was standard operating procedure:

A CBS producer found clothes, luggage, kitchen, bath and bedding products — 15 items in all — marked up, some as much as $100, and price tags on top of price tags.

Other items have different price tags on different areas of the product.

One twin sheet set was listed at 50 percent off the original price of $89.99. But inside the plastic zipper, the earlier price tag shows $49.99, indicating the current sale is only $5 savings from the original tag.

A 10‚Ä≥ skillet was listed on sale for $34.99, with a regular price of $39.99, but underneath that sticker, the earlier price tag was marked $29.99 — meaning Kohl’s current price on sale is $5 more than the originally marked price.

One producer tried pointing out that a $150 sheet set marked at 30% off also had a price sticker showing a price of $90, about $15 less than what they would pay with the discount.

The producer asked the cashier if they could get 30% off the $90. A manager decided this was okay and told the undercover producer, “Sometimes when we do scratch-off coupons, we mark stuff up.”

A consumer attorney tells CBS that Kohl’s may be violating California state law if it is deliberately marking up prices just to make sales appear better than they should.

But Kohl’s denies any such behavior, saying that prices of in-stock items went up because the cost of certain new inventory went up:

As is common in the retail industry, from time-to-time, product prices are increased due to production and raw material costs. When these types of price increases are implemented, our stores are instructed to re-ticket all items currently in our inventory to match the price tags for all in-coming merchandise…

Price increases at Kohl’s are not common. However, the unprecedented increases in the cost of certain commodities such as cotton over the past 24 months have caused us to take these actions.

The retailer confirms that the price of the sheet set mentioned at the top of the story did indeed go up dramatically because they had to match the price Kohl’s was going to charge for sheets made with cotton that was now costing everyone more money.

Call Kurtis Investigates: Are Stores Marking Up Before Markdowns? [CBS Sacramento]

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