Retail Furs Limited carried on business as a furrier in a large metropolitan city. The general…

Retail Furs Limited carried on business as a furrier in a
large metropolitan city. The general manager attributed much of the company’s
sales volume to the use of extensive advertising and frequent “sales.” As a
general practice, the store held four sales a year: a summer (off-season) sale,
a fall sale, a New Year’s sale, and a spring sale. In addition, the general
manager would occasionally hold a special sale if sales volume was below
expectations for the year. Each sale normally lasted a month, although
extensions were occasionally made to clear models that proved to be poor
sellers.
»

Retail Furs Limited carried on business as a furrier in a
large metropolitan city. The general manager attributed much of the company’s
sales volume to the use of extensive advertising and frequent “sales.” As a
general practice, the store held four sales a year: a summer (off-season) sale,
a fall sale, a New Year’s sale, and a spring sale. In addition, the general
manager would occasionally hold a special sale if sales volume was below
expectations for the year. Each sale normally lasted a month, although
extensions were occasionally made to clear models that proved to be poor
sellers. During the past year, the company held five sales, and each featured a
standard type of mink jacket at 50 percent off the regular price. On the last
day of the final sale for the year, a customer entered the store and wished to
purchase one of the advertised jackets. The regular price was stated as $6,000,
and the sale price $3,000. The customer, however, argued that the regular price
was really $3,000 for at least 5 of the previous 12 months. The general manager
denied that $3,000 was the regular price and refused to sell the jacket for
$1,500. An investigation into the ordinary selling prices of similar jackets in
the area found that prices ranged from $2,995 to $7,500, depending upon the
quality of the fur pelts, the cut, and the style. Discuss the issues raised in
this case.

»

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