Hudson's Bay inflated mattress prices to fake the discount — Canada fined $4.5M

Canada's oldest company ran its sleep-set business on what the Bureau calls high-low pricing: offer mattresses at inflated regular prices, then advertise deep discounts against them, so the savings look real. The 'regular price' was a number chosen to be discounted, not a price anyone paid. The Bureau also found the clearance claims misleading — ads implied prices were cut to move remaining inventory, when in fact the stores held little stock and simply ordered new product from manufacturers when a customer bought.

The Bureau took legal action in 2017 against the practices at the Hudson's Bay banner's 89 stores, running since at least March 2013. On 8 May 2019, two days before litigation was to begin, Hudson's Bay signed a consent agreement: a $4 million penalty plus $500,000 toward the Bureau's costs, sleep-set and major-appliance marketing brought into compliance with the ordinary-selling-price rules, and a corporate compliance program, binding for ten years.

The case drew the line for every 'was $1,999, now $799' ad in Canada: the ordinary selling price must be a real price, and 'clearance' must clear actual stock. Commissioner Matthew Boswell called unsubstantiated savings claims a barrier to informed purchasing — the penalty made them a priced one.