4 Retailers Sued (Again) Over Deceptive Pricing

Posted on by RetailGuy
  Only in California.  Four retailers have been sued due to deceptive advertising, namely posting a fake “regular price” to make their not-really-a-sale price look more attractive.   I remember years ago that the retailer I worked for got in trouble for this as well, because we were selling our Christmas cards at “50% OFF!” but we had never actually sold them at the original (prepriced) price.
     This is certainly not a new tactic and not the first time a city in California has filed suit because of it.  I think the majority of consumers are smart enough and tech-savvy enough to know when a price is real, but even the retailer I currently work for has some questionable “Original value” price on seasonal items, for example.   Kudos to the district attorney for going after these 4 retailers, especially since I shop at one of them and might end up getting a settlement check down the road.
   I do wonder though, does this only happen in lawyer-happy California or in other states do the stores just continue to do it?
Image result for Kohls images 

Los Angeles City Attorney Mike Feuer filed suit against four large retailers Thursday, alleging the retailers have used deceptive pricing in stores.

That amazing deal where a sweater is being offered for $25 when it used to be priced at $100 may not be so amazing and customers should be aware, Los Angeles City Attorney Mike Feuer said Thursday.

Feuer’s office filed lawsuits against four big retailers for deceptive advertising Thursday that allegedly misled shoppers into believing that thousands of products were on sale at a hefty discount.

The retailers — Macy’s, Sears, JC Penney and Kohl’s — allegedly advertised high “list” or “regular” prices on merchandise that was never actually available at that price, according to the lawsuit, in a practice known as “false reference pricing.” The pricing allegedly caused customers to believe they were getting a better bargain with the “sale” price than they actually were.

Feuer held a news conference at City Hall Thursday to discuss the lawsuits

 “Customers have the right to know the truth about the prices they are paying,” Feuer said. “Customers have the right to know when a sale is really a sale, and when a bargain is really a bargain. But we’ve alleged that Kohl’s, (JC) Penney’s, Macy’s and Sears continue to mislead their customers.”

California law bans retailers from advertising a higher original price unless a product was actually available at that price within three months of the ad running. Feuer said the evidence his office collected focused on thousands of online transactions, but that he had reason to believe the practices also were underway at stores.

“How hard is it for any individual consumer to enforce this? It’s almost impossible, so this is why it falls to us on behalf of the people of the state to take an action like this,” Feuer said.

The suits will seek civil penalties and injunctions to prohibit such pricing.

 This is not the first time that retailers have gotten in trouble for false reference pricing schemes, the Los Angeles Times reported. In 2015, class action lawsuits were filed against JC Penney and Kohl’s accusing the retailers of tricking customers by inflating original prices. JC Penney eventually settled the suit for $50 million in cash and store credit to customers, and Kohl’s agreed to pay $6.15 million.

Feuer said that JC Penney’s and Kohl’s represented to courts in the class action suits that they would not engage in false reference pricing, “But we allege that they continue to do it anyway.”

Representatives from JCP, Sears, and Macy’s declined to comment.

Feuer cited several specific examples of evidence his office collected for the suits. They include:

In February, 2016, J.C. Penney’s website allegedly first advertised a maternity swim top with an “original” price of $46 and a “sale” price of $31.99. However, the purported “original” price of $46 allegedly was a false reference price.

In January, 2016, Kohl’s allegedly first offered for online sale belted cargo shorts for a reduced price of $35.99 from an “original” price of $60.However, the purported “original” price of $60 allegedly was a false reference price.

In May, 2016, Macy’s allegedly first offered for sale online a “Giani Bernini Large Cross Pendant Necklace in Sterling Silver,” with an “original price of $120 and a “sale” price of $30. However, the purported “original” price of $120 allegedly was a false reference price.

In April, 2016, Sears allegedly first advertised online a Kenmore washing machine with a “regular” price of $1,179.99 and a “sale” price of $999.99. However, the purported “regular” price was a false reference price.