Kant's Ethical Theory

Fraud is generally defined as an omission of a material fact or a misrepresentation of the truth, intended for personal gain or to cause loss to another party. The act of fraud is most commonly committed in order to deprive another of money, property, or a legal right. Fraud is considered criminal activity, and anyone who is affected by a fraudulent act has the ability to file a lawsuit to collect damages. J.C. Penny was accused of marking up the prices on their products and then discounting them to the original price in order to trick customers into thinking they were receiving heavy discounts and better deals. J.C. Penny committed this act for their own personal gain, and in doing so, they deprived their customers of money that they would
have saved had the products been actually discounted. They misrepresented the truth in their actions by not disclosing their pricing methods to their customers.
J.C.
Penny’s actions in this instance present some clear ethical issues. First, looking at Aristotle’s principle of “virtue ethics,” it must be determined whether the actions made by J.C. Penny are just, or fair, to their customers. Clearly, it is unfair for a company to deceive their customers into believing they received better deals then they actually did, and based on that analysis, Aristotle would have most definitely concluded the behavior of J.C. Penny to be unethical. Further, considering Immanuel Kant’s theory of the “categorical imperative,” and making decisions based off of the question “what if everyone did this?,” it is fair to assume that he would have determined this behavior unethical as well. If every company were to trick their customers similar to how J.C. Penny did here, it would be difficult to instill trust into the pricing methods of any business, which would slow the economy. Looking at Ross’s Prima Facie duties and the duty of beneficence, J.C. Penny’s decisions were not made to enhance the well-being of others. They purposely defrauded their customers in order to increase sales, which Ross would surely find unethical. The only theory that would consider the actions of J.C. Penny ethical is that of Utilitarianism. Bentham and Mill believed in making decisions based on what would affect the “greater good.” Here, J.C. Penny’s actions benefit its employees, shareholders, and suppliers by increasing their profit, in turn providing jobs for its employees
and suppliers, as well as satisfying its investors and shareholders.
In J.C.
Penny’s code of ethics, they talk about their commitment to their customers under the “Communications” heading. The company lists fairness and honesty as two values they always strive to abide by in everything they do. It mentions that they always ensure any message they release to their customers is accurate and truthful, and that they aspire to comply with all laws in the areas of product pricing, which they evidently failed to do so in this case. They also assure their customers that they should always be able to trust the company to do what is honest and right. Under their corporate social responsibility report, they mention that J.C. Penny was founded on the beliefs of James Cash Penney, who originally named the company the “Golden Rule Store” to emphasize his belief in treating others as he would want to be treated. Additionally, they claim that while the company has evolved greatly since it was founded, it still operates in accordance with Penney’s core values of demonstrating integrity and the highest ethical standard in everything they
do.
In this case, J.C. Penny directly went against their code of ethics and deceived their customers into thinking they were receiving better deals when they really were not. They failed to comply with specific laws in the areas of product pricing, and were dishonest to their customers. Unfortunately, codes of conduct do not always ensure ethical business practices. It is becoming increasingly popular for companies to ignore their own ethics codes in order to increase revenue and cut expenses, which more often than not results in grave consequences. It is obvious that J.C. Penney needs to reinforce their ethical policies and ensure that their future business decisions are made in the best intent of their customers.