Michaels framed fake discounts — regular prices no one ever paid — fined $3.5M

Michaels of Canada ran its framing business on a discount story: substantial markdowns against stated regular prices. The Competition Bureau's investigation found the regular prices were not real — frames were not offered for sale in good faith at those prices before the promotions began. Custom framing carried the practice from January 2011 to December 2014; select ready-made frames from January 2013 to December 2014. The discount implied savings that the ordinary selling price provisions of the Competition Act do not allow.

On 6 May 2015 Michaels agreed to pay a $3.5 million administrative monetary penalty, establish a corporate compliance program, and bring all future price claims into line with the ordinary-selling-price rules, under a consent agreement binding for ten years.

Deputy Commissioner Stéphane Lamoureux stated the principle: consumers win when retailers offer aggressive discounts, but savings claims must be substantiated, because shoppers respond to the implied savings in any regular-versus-sale comparison. The case put Canada's craft aisle on the same rule as its furniture and mattress showrooms.