When plaintiff Timur Safransky went to the Fossil Outlet store at Carlsbad Premium Outlets in Carlsbad, California, the complaint for this class action says, he noticed a sign in the window outside saying, “Entire Store Up to 40% Off.” Inside, he saw a bag that had supposedly been priced at $198, which a sign said was now selling for “40% off ticketed price,” and he bought it, believing he was getting a bargain. However, the complaint claims that the bag was never actually offered at $198 and was simply a lower-priced item with a false reference price attached.
The class for this action is all persons who, between September 13, 2013 and the date of final judgment of this class action, bought one or more Fossil Outlet products at any of the Fossil Outlet stores in the state of California, at a purported discount off a stated reference price on the tag, and who have not received a refund or credit for the product.
Consumers love discounts. When they see an item bearing a high original price tag and a lower current one, they believe that the item was made with good material and higher-quality workmanship, and that they can now obtain those qualities at a much lower price.
Outlet stores have become popular in recent years because consumers believe that outlets sell marked-down merchandise from more expensive, mainline stores. However, the complaint claims that products in Fossil Outlet stores are made exclusively for the outlets. It claims they were never sold at the regular Fossil stores or at the reference prices on the tags, and that the outlets put artificial reference prices on the item tags to create the illusion that the items are higher quality and that the “discounted” price is a good deal.
According to the complaint, an investigation showed that the reference price on plaintiff Safransky’s bag was never its true market price in the ninety days before he bought it and that similar deceptive advertising practices were pervasive at the Fossil Outlet stores. The complaint says that items were not offered for sale at the reference prices on their tags, that they were continually offered at the “discounted” prices, and that even new items introduced at the outlets were offered at “discounted” prices.
California law requires that reference prices be the prevailing market retail price within the three months immediately before the advertised former prices. Federal laws also require that discounts be genuine. The complaint claims that Fossil Outlets have violated California’s Unfair Competition Law, its False Advertising Law, and its Consumer Legal Remedies Act.