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 SPOKANE, Wash., Sept. 23 /PRNewswire/ -- The State Attorney General's Office (AG) filed a lawsuit today against Smith's Home Furnishings Inc. for allegedly using deceptive advertising practices in television, radio, newspaper and direct mail ads.
 The suit, filed in Spokane County Superior Court, applies to Smith's advertising practices statewide. The firm has four stores in Washington -- Spokane, Tacoma, Lacey and Bellingham -- and eight other stores in Oregon and Idaho.
 "What makes this case notable is the extent and aggressiveness of Smith's advertising program," said Senior Assistant Attorney General Owen F. Clarke, head of the AG's Spokane Office. "They are one of the largest advertisers in the state's retail furniture market. Their newspaper ads are often one or two pages and they advertise extensively on television, radio and by direct mail. Smith's advertising has had a significant impact on the retail furniture market in Spokane and elsewhere in the state."
 The suit alleges Smith's used a variety of deceptive advertising practices including:
 -- "Bait and switch" sales practices in which Smith's has advertised
 selected times to bring consumers into their stores, but did not
 make available a sufficient quantity of the items to meet
 anticipated demands. The Attorney General's Office also alleges
 that Smith's salespeople sometimes disparage the quality of
 advertised items in order to switch consumers to higher profit
 -- Continuous sales in which Smith's routinely advertises and
 represents that its prices are "special" or "sale" prices that
 will last for a limited time. In fact, some "special" or "sale"
 prices have been found to remain the same after the sale has
 -- Deceptive advertising of credit terms. Smith's frequently
 advertises in large print, "No Down Payment, No Payments and No
 Interest for One Year." Under one of the two financing plans
 which Smith's offers, interest accrues throughout the first year
 and must be paid unless the financed merchandise is paid for in
 full by the end of one year;
 -- "Compare Price" ads in which Smith's advertises items at a
 purported "sale" price by urging customers to compare prices.
 The price to compare with is never defined or explained. The
 customer has no way of knowing whether to compare the "sale"
 price with a manufacturer's suggested retail price, a
 competitor's price, or Smith's own former price;
 -- "One-half off" sales in which Smith's advertises items at
 significant discounts such as "1/2 Inventory, 1/2 Off, 1/2 Day."
 The ads fail to specifically identify the merchandise being
 offered or disclose the original price from which the "1/2 Off"
 discount is purportedly taken;
 -- "Invitation Only" sales in which ads claim the store will be
 closed to the general public and that only preferred customers
 who have an invitation will be admitted to the store. Customers
 are not asked to present an invitation before entering the store
 and customers not having an invitation are allowed to make
 purchases during the hours of the "invitation only" sales; and
 -- "Pricing At Par" ads which were aimed at Canadian customers to
 entice them to travel to the United States to shop at Smith's
 Bellingham store. The ads claimed "Pricing at Par, Your Exchange
 Rate Equals 0 percent," which was meant to indicate that Canadian
 customers who paid for their purchases in Canadian dollars had
 the same buying power as customers who paid in U.S. currency.
 However, the Attorney General's Office alleges that the prices of
 the advertised merchandise were adjusted to account for a 19
 percent currency exchange rate.
 The AG's Office is asking the court to stop Smith's Home Furnishings for engaging in deceptive advertising and sales practices. The firm could face civil penalties and legal costs.
 -0- 9/23/93
 /CONTACT: Owen F. Clarke, 509-456-6373; or Christine Anthony, 206-753-1476, both of the Washington State Office of the Attorney General/

CO: Washington State Attorney General's Office ST: Washington IN: SU:

RB-IC -- SE004 -- 5146 09/23/93 11:04 EDT
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Publication:PR Newswire
Date:Sep 23, 1993

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