This class action alleges that Nine West advertises false discounts on the merchandise in its outlet stores using false reference prices—that is, the complaint claims, the store marks its items with a false “original price,” even when the items were never offered at that price, and then claims that the current price is a big markdown.
The class for this action is all persons who purchased, in the state of California, during the class period, a product from a Nine West outlet store at a discount from an advertised “suggested retail” price and who have not received a refund or credit for that purchase. (The class period is currently defined only as “the applicable statute of limitations period.”)
When consumers see a hefty markdown from an original price, they often believe that the merchandise is of higher quality, and they are more likely to purchase the item because they think they are getting a bargain. Knowing this, stores sometimes use fake “original prices”—also called false reference prices—to encourage shoppers to buy. Outlet stores are particularly susceptible to this practice, because consumers come there expecting bargains on merchandise moved there from their regular stores. However, laws have been passed against the use of such false reference prices and phantom discounts.
The complaint for this class action alleges that, at Nine West outlets, the “suggested retail” price is a fiction, and not the bona fide price that the Federal Trade Commission (FTC) requires. California laws require that the advertised “suggested retail” or “original” price have been the prevailing market retail price within the three months immediately preceding, but the complaint claims that the items sold at Nine West outlets are created especially for those outlets, and that the current price is the only price at which the items have ever been offered.
The complaint claims that an investigation of two Nine West outlet stores was made on behalf of the plaintiff in this case, and that the investigation showed that the allegedly false “suggested retail” price and the corresponding “our price” were the same at both stores and at all times. The investigation ran for well over ninety days, but the prices did not change; the items were never offered at the higher “suggested retail” price.
The complaint thus claims that the pricing scheme violates California and federal laws on false or misleading advertising which prohibit false reference pricing and phantom discounts. Specifically, the complaint claims, the stores have violated California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act as well as the Federal Trade Commission Act (FCTA) which forbids “unfair or deceptive acts or practices” in commerce.