Plaintiff Gaby Basmadjian bought a ring from The RealReal, Inc. that was advertised as containing 2.10 carats of diamonds. After she received the item, the complaint for this class action alleges, she had it appraised, only to find out that it contained only 1.2 carats of diamonds. The ring was not returnable, and the complaint claims it’s not unusual for RealReal to misrepresent the gemstone weight of the items it sells.
The class for this action is all persons in the US who, after December 1, 2013, bought from The RealReal one or more pieces of jewelry where the weight of the gemstones indicated on the product label exceeded the weight of the gemstones in the jewelry by more than 1/100 of a carat (1 point, 2 mg).
RealReal runs a luxury consignment website, TheRealReal.com, in conjunction with eight consignment offices. Individuals may send or drop off luxury items that they wish to sell or have them picked up by the company. The company’s “experts” then authenticate, price, and sell the items. According to the complaint, the company guarantees that every item they sell is “100% the real thing.”
However, the Federal Trade Commission has strict rules about stating diamond weights, including the following: “If diamond weight is stated to only one decimal place (e.g. .5 carat), the stated figure should be accurate to the second decimal place (e.g., ‘.5 carat’ could represent a diamond weight between .495-.504).”
In other words, the allowable range for the 2.10 carats advertised is 2.0955 to 2.1055 carats. However, the real weight is 1.2 carats, far outside this range and a .9 carat or 75% discrepancy. The complaint alleges that Basmadjian should therefore receive a refund of 75% of the portion of the purchase price attributable to the diamonds. If 50% of her purchase price of $982.62 was attributable to the diamonds, it says, then she is owed 75% of roughly $450, or $193.
The complaint further claims that the total appraisal amount is not a guide to the value of the jewelry, because it is subjective. In other words, even if a jeweler were to appraise the ring at a higher value than the purchase price, this is not an adequate excuse for the price, as a different appraiser might arrive at a different value and the customers are still being overcharged for the diamond weight by a measurable amount.
Further, the Terms of Service at the company’s website state, “These TOS and the relationship between you and RealReal will be governed by the laws of the State of California without regard to its conflict of law provisions.” RealReal’s headquarters and principal place of business are in California, the complaint says, so that the state’s laws should apply to this case, no matter where the buyers live.
According to the complaint, RealReal’s actions violate the California Business and Professions Code, including its False Advertising Law, and the state’s Legal Remedies Act, among other things.