'Sale' signs less prevalent in tourist district

Posted: Friday, May 14, 2010

A crackdown on illegal advertising aimed at tourists in the state's port towns seems to be working in Juneau, as the season opened with virtually no "discount" signs in the downtown tourist district.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

Some retail locations on South Franklin Street used large signs displayed in windows and on sidewalks this week but did not advertise huge discounts or make claims such as "70% off," "blowout sale" or "clearance" pricing.

Early season advertising of huge discounts in past years was one practice that caused the state to pursue store owners for breaking consumer protection laws, Assistant Attorney General Cindy Drinkwater said.

"(The signs) basically suggested an impossible situation because to have a sale you have to sell merchandise at a reasonable price first," she said.

Last summer, the state pressed charges against two separate jewelry store owners for advertisements the state said were unfair or deceptive. The charges came after letters were sent to businesses whose advertising practices were identified as suspect through an investigation. One store owner agreed to pay a $50,000 fine and another case is set to go to trial in August.

The state also received complaints about other sales practices, such as gold nuggets being sold as Alaskan when they actually were manufactured outside the state, but Drinkwater said no charges have been filed in those cases.

The problem is not limited to jewelry sales but is focused in port towns where cruise ships stop, Drinkwater said.

"I've heard store owners say this is how they operate when they're in the Caribbean," Drinkwater said. "They come here for the summer and they're not aware of the laws here but it's certainly incumbent on business owners to know the law in the places where they're operating."

Some store owners said the signs were necessary to attract customers, and removing them caused sales to plummet.

Tobe Thompson closed her two stores, Fire & Ice Alaskan Gold and Platinum Design, and moved out of Juneau after 15 years in 2008, in part due to the business atmosphere that developed after the large cruise lines implemented onboard port lecture programs, she said.

Unfair advertising was just one negative trickle-down effect of the programs, she said. The lectures done by separate companies are designed to educate cruise ship passengers about the port but also encourage people to go to member businesses that in turn pay a fee for the promotion.

"They deliberately try to create a frenzy," over retail items available in port towns and encourage bargaining, she said.

Thompson, who now owns a gallery in Santa Cruz, Calif., complained to the state about advertising violations but found officials weren't proactive. Sale signs in the later years she did business downtown were displayed from the first day of the cruise ship season until the last day, she said, creating a difficult situation for a business that uses legitimate pricing.

"A store that's not willing to put a fake price on looks overpriced," she said.

• Contact reporter Kim Marquis at 523-2279 or kim.marquis@juneauempire.com.

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