The Los Angeles city attorney’s office said it plans to sue four big retailers for deceptive advertising which allegedly misled shoppers into believing that thousands of products were on sale at a hefty discount.
The retailers — JC Penney, Sears, Kohl’s and Macy’s — falsely advertised high “list” or “regular” prices on merchandise that was never actually for sale at that price, according to the lawsuits to be filed Thursday. That led customers to believe that they were getting a better bargain with the “sale” price than they actually were.
These tactics — called false reference pricing — “play a major role in the companies’ overall marketing and business strategies,” the L.A. city attorney’s office said in a statement.
JC Penney said it “doesn’t comment on pending litigation.” Sears declined to comment, while Macy’s and Kohl’s did not respond to requests for comment.
California law bans retailers from touting a higher original price unless a product was actually for sale at that price within three months of the ad running. Retailers are also allowed to advertise a higher former price if the ad “exactly and conspicuously” states the date when that price was in effect.
“Customers have the right to be told the truth about the prices they’re paying — and to know if a bargain is really a bargain,” City Atty. Mike Feuer said in the statement.
The lawsuits, which are seeking civil penalties and injunctions to prohibit such practices, cite several recent examples of false advertising.
In February, JC Penney began selling a maternity bathing suit top online for a “sale” price of $31.99, down from an “original” price of $46, according to one suit. That top was later marked down to $21.99 and then $14.99 — all the while compared to $46. However, it was never for sale at $46, the suit alleges. The highest price was $31.99.
High-ticket items were also subject to this kind of inaccurate pricing.
Sears, for example, began selling a front-loading Kenmore washer in April, according to one suit. On the first day it appeared online, Sears showed the washer on sale at $999.99, down from $1,179.99 — even though it was never sold for more than $999.99.
“As time went on, the item had a series of different false discounts,” the suit alleges. Sears eventually discounted the item down to $649.99 while “falsely advertising a discount from the $1,179.99 false reference price.”
This is not the first time that retailers have gotten in trouble for false reference pricing schemes.
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.
Source: www.latimes.com
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