The Inflated ’Original’ Price: A Retailer’s Oldest Trick That Still Works Today

Walk into any big-box store and you’ll see it: a price tag with a strange, impossibly high number crossed out, and underneath a bold “SALE” price that feels like a victory. For example, a $3,000 patio set marked down to $1,800. Or a $1,200 laptop now listed for $899. The message is clear—act now, because you’re stealing this thing. But here’s the uncomfortable truth that no one behind that counter wants to admit: that original price was, in many cases, never real. It was a number created on a spreadsheet, inflated to make the actual selling price look generous. For middle-class Americans in their 50s and early 60s, who have worked too hard for their money to toss it away on a psychological gimmick, it’s time to understand exactly how this fake “was” price works.

Retailers know that older shoppers have a long memory. They remember when a sale actually meant a temporary markdown from a genuine list price. So stores exploit that trust by constructing a phantom list price, called the Manufacturer’s Suggested Retail Price, or MSRP. But manufacturers these days often set an MSRP that they never expect anyone to pay. They do this to give retailers cover for deep discounts. A furniture store might buy a solid wood table for $450 from the factory, then attach an MSRP of $2,200. The store plans to sell it at $1,100, a “60% off” bargain. Yet even that discounted price carries a fat profit margin. The real trick is that you’re not paying $1,100 instead of $2,200—you’re just paying a price that was always meant to be the standard. The entire “sale” is a fiction.

Now add the warranty pitch. After you commit to that seemingly discounted sofa or refrigerator, the salesperson leans in with a worried face and tells you about the high cost of repairs. They offer an extended warranty for another $400 or $500. You’ve just been convinced you got a great deal on the main product, so this add-on seems smart. But consider the math. The store already made a healthy profit on the sale. The warranty, however, is pure profit because the majority of buyers never use it. When they do, the warranty company often excludes what you thought was covered—or charges a trip fee that eats up half the repairs. You’re better off putting that warranty money into your own emergency fund.

The deeper problem is that many retail stores never actually sell a product at the original price. Jewelry is notorious for this. A diamond pendant might show a “retail value” of $4,000 and yours for only $1,999. Everyone wins, right? Wrong. Independent appraisers will tell you that the pendant’s fair market value is around $1,500. The so-called $4,000 price exists solely so you feel lucky. Same goes for power tools, mattresses, and even home appliances. Check online tools that track price history for electronics or furniture, and you’ll often see that the item sits at a “discounted” price for eleven months of the year. The one week when it’s at full price, you just got unlucky—or the store is adjusting for its own quarterly numbers.

So what can you do? Stop comparing the sale price to the crossed-out original. Instead, research what that exact model or product actually sells for from multiple retailers. Use price comparison sites, and look at the average selling price across the industry. If a $2,000 sofa is available every day for $1,400 at three different stores, then $1,400 is the real price. Wait for a holiday weekend when stores drop it to $1,100 if you’re not in a hurry. The urgency of the “only two left” or “sale ends today” is manufactured pressure. The store will have another sale next week, because they always do. For durable goods, fine. For ordinary purchases, be patient.

When the warranty pitch arrives, ask yourself a simple question: what would it cost to repair this item out of pocket? A $300 extended warranty on a $600 microwave is a waste. Your credit card might already double the manufacturer’s warranty if you use that card to pay. Check that before you sign anything. Also know that the salesperson’s commission on a warranty is often higher than on the product itself. That’s why they push it. They’re not protecting you; they’re collecting a bonus.

You have earned every dollar in your wallet. Don’t let a fake list price and a scary story about broken compressors separate you from more of them. The next time you see a florescent orange tag claiming 50% off, take a breath. Look up the real market value on your phone. Ask the store for their best cash price without the warranty. And remember that the only reliable warranty is your own informed skepticism. Use it, and you’ll keep more of your hard-earned money where it belongs: with you.