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Saks Off Fifth Inflated “Original” Prices Class Action

Front of Saks Fifth Avenue Off 5th Store

Consumers love bargains. They love the idea that they are getting higher quality at a lower price. However, if the “original” price quoted is a false one, then they are not in fact getting the bargain they think they are. The complaint for this class action claims that Saks Off Fifth, an outlet of Saks, Inc., deceives customers as to the worth of their merchandise.

The class for this action is all consumers who, between the applicable statute of limitations and the present, bought or tried to buy Saks products which were marked as discounted from the original price, when in fact the original price had been changed.

Recently many class actions have been brought against stores that use “false reference pricing”—that is, they cite false “original” prices to make the merchandise seem better quality or post signs claiming they’re giving large discounts on certain items. 

Some even go so far as to have a cheaper line of clothing made for their outlet stores which were never intended to be sold at higher prices, then simply add the imaginary “original” prices to make the regular prices seem like a bargain. In these cases, customers believe they are getting higher-quality merchandise at lower prices, but in reality, the merchandise was of lower quality to begin with.

Plaintiff Johnson Hung bought an item of clothing from Saks Off Fifth. The store claimed that the original price of the item was $1,280 and that it was marked down by 82%. However, he later found a tag under the discounted price tag that showed that the item had been sold for only $640, half the quoted price. Hung contacted Saks about the deception, but the store representative told him that the store has the right to sell items at any price it chooses. 

California has some of the most extensive consumer protection laws in the nation, and the complaint brings suit under them. 

To begin with, the complaint cites the state’s False Advertising Act, which forbids advertising that “is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading…”

Second, it cites California’s Unfair Business Practices Act, including its unfair, fraudulent, and unlawful prongs. For example, the test under the fraudulent prong is whether the fraudulent practice is likely to deceive members of the public. 

Third, it cites California’s Consumer Legal Remedies Act, under such provisions for violations as “Representing that goods or services are of a particular standard, quality, or grade … if they are of another” and “Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not[.]”

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