Throughout our 30 years in business, we've heard tell of Michaels custom framing department's misleading practices. Specifically, it was the 50% off coupon that our customers would mention - that even with the coupon, Michaels' prices were still higher than our regular prices. It always left us scratching our heads. Now the courts have recognized the craft giant's underhanded advertising practices, and the big mystery finally all makes sense....
From the
New York State Attorney General website:
ROCHESTER – As students and teachers returned to school this
month, Attorney General Eric T. Schneiderman today announced that retail
chain Michaels Stores, Inc. has agreed to enter a $1.8 million
settlement for engaging in deceptive advertising practices by misleading
consumers into thinking they were receiving steep discounts over a two
year period. As part of the settlement, the company will change its
advertising practices and contribute $1 million in art and craft
supplies to public schools throughout New York State, in addition to
$800,000 in civil penalties.
"For years, Michaels duped consumers into thinking they were
receiving huge discounts, when in fact, they were simply paying the
regular store price," said Attorney General Schneiderman. "Through
deceptive advertising practices, this company violated the law and took
advantage of hardworking consumers trying to save money. In addition to
the civil penalties, the company is paying for their actions by
providing $1 million in school supplies for hundreds of school districts
statewide."
Michaels Stores, Inc. describes itself as a specialty retailer of
arts, crafts, scrapbooking and custom framing. Its 48 stores
throughout New York State are frequented by parents, students and
teachers to purchase school supplies.
As a result of the Attorney General’s settlement, Michaels will
be required to give back to the public schools in communities which
their stores are located. Today’s action will benefit as many as 724
school districts throughout the state. The schools are set to receive $1
million in gift cards to purchase supplies.
The investigation began in 2009 when the Attorney General’s
office began tracking the 50 percent off marketing materials where
Michaels advertised its “Custom Framing” as a sale product for at least
104 consecutive weeks. The law prohibits sales that are never ending.
Investigators throughout the state collected newspaper flyers, online
flyers, in-store banners and signs advertising the custom framing.
Michaels advertised in at least one of these forms every day for two
years. The ads stated that custom framing was either at least 50 percent
off or a certain dollar amount off.
Michaels has agreed to settle the investigation by paying civil
penalties of $800,000 in addition to the $1 million to New York’s public
schools for violating General Business Law (350-D) for False
Advertising.
The case was handled by Assistant Attorney General Benjamin Bruce
under the direction of Assistant Attorney General In-Charge of the
Rochester office, Debra Martin and Executive Deputy Attorney General for
Regional Affairs, Martin J. Mack.
