The Durbin Amendment Is crippling American consumers
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Holiday shoppers, be forewarned: not all the “deals” you see advertised represent an actual bargain.

Four major department stores – Kohl’s, Macy’s, JC Penney and Sears – were sued by the Los Angeles city attorney for using deceptive ads to trick shoppers into thinking their products were deeply discounted.

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The tactic, once known as “bait and switch,” is now referred to as “false reference pricing.” But the strategy is the same: Advertise the “sale” price of just about any item (for our purposes, let’s say a sweater) and tell customers it was marked down from the “original” price.

The rub, of course, is that the sweater never actually sold for that original price, so the stores are deceiving their customers. The practice is so common that Wisconsin Gov. Scott Walker frequently joked on the campaign trail about his own method of gaming the system at Kohl’s.

This misleading advertising is eerily reminiscent of the political tactics the retail industry employed in the wake of the financial crisis to boost their bottom lines. Seizing on the calamity, they snuck a provision into the Dodd-Frank financial-market reforms that capped the amount of money they had to pay for debit-card transactions.

At the time, industry executives promised members of Congress they would pass any savings along to their consumers.

Lyle Beckwith, senior vice president for government affairs at the Association for Convenience and Fuel Retailing, said, “If fees are cut, small businesses will be able to grow their business, pay their employees more and pass savings along to their customers.”

Well, that hasn’t exactly been the case. A study by the Federal Reserve Bank of Richmond found that just 1 percent of retailers had actually lowered their prices after Congress passed the legislation, named for Illinois Sen. Richard DurbinRichard (Dick) Joseph DurbinGrassley to administration: You must consult Congress on refugee cap Overnight Health Care: Senators target surprise medical bills | Group looks to allow Medicaid funds for substance abuse programs | FDA launches anti-vaping campaign for teens Bipartisan group wants to lift Medicaid restriction on substance abuse treatment MORE. That’s not what most people would consider “pass(ing) savings along to their customers.”

On the contrary, the so-called Durbin Amendment has generated billions of additional revenue each year for Big-Box retailers and other large national chains, including the four department stores ensnared in this California lawsuit about deceptive advertising practices.

Just as misleading ads encourage consumers to make bad buying decisions, these false promises from the retail industry helped paved the way for Congress to pass a bad law. This legislative bait-and-switch isn’t that much different than the deceptive ads that got Macy's, Sears and others in legal trouble.

In both cases, the retail industry used bad information to encourage people to make misguided decisions. In the case of the debit-card legislation, consumers have seen higher bank fees and a reduction free checking, without benefiting from lower prices at the register.

Just like the city attorney in Los Angeles filed a lawsuit to protect consumers in Southern California, Congress can reverse its own bad buying decision by repealing the misguided Durbin Amendment to give consumers real relief, not just empty promises.

Megan Barth is the founder and proprietor of ReaganBaby.com and a nationally recognized political commentator.

The views expressed by authors are their own and not the views of The Hill.