Deceptive Discount Offers
Burlington Coat Factory is settling a class action alleging that it displayed false reference pricing on merchandise in its stores in New Jersey.
Are the items for sale at Kate Spade outlet stores really discounted by as much as the tags say? The complaint for this class action alleges that the company creates false reference prices in order to make consumers think they are getting a bigger bargain than they actually are.
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.
PVH Corporation, which owns the Van Heusen stores, has agreed to a settlement in a class action. The complaint alleged that merchandise in Van Heusen stores had tags indicating a false original or “reference” price and then a lower price, indicating that the items were on sale and that buyers were getting a bargain.
Walmart is settling a class action alleging that when customers bought items with coupons, it charged them sales tax on the original price of the item rather than on the price they actually paid for it. The complaint claims that Pennsylvania state law requires retailer to deduct the value of the coupons before calculating sales tax.
Neiman Marcus is settling a class action alleging that it misled customers with “Compared To” prices on price tags at its Last Call outlet stores in California.
Tommy Hilfiger runs outlet or factory stores that sell its clothing at lower prices than its main stores. But the complaint for this class action claims that the lower prices do not reflect legitimately discounted merchandise but a scheme of false reference pricing, where customers are led to believe that the goods are higher quality than they actually are.
If a company says it “always” sells an item at a markdown, what is the item’s “regular” price? The complaint for this class action says that Hobby Lobby Stores offer false discounts that apply only to prices at which the merchandise never sells—a variation on the “false reference pricing” allegations made at many outlet or “factory” stores.
This settlement resolves two combined class actions alleging that Guess Factory outlet stores in California violated consumer protection laws by engaging in false advertising. The lawsuits claimed that the stores labeled their merchandise with false “original” or reference prices.
Sports Warehouse is setting aside a fund with $3 million to settle a class action alleging that it used fake “original” pricing to give customers the impression that they were getting big discounts. California has precise laws governing the use of “original” or reference prices and does not allow companies to create the impression of false sales or discounts.