L.A. Sues Major Retailers for Misleading Customers
The Los Angeles City Attorney’s Office has filed a lawsuit against four retail giants for allegedly duping customers into believing they were getting bargains when no such bargains existed.
Under California law, you can’t advertise a markdown from an original price that didn’t actually exist. But that’s what these four retailers—JC Penney, Sears, Kohl's, and Macy’s—did, according to City Attorney Mike Feuer. The strategy, known as false reference pricing, “play a major role in the companies’ overall marketing and business strategies,” the L.A. City Attorney’s Office said.
In one instance, JC Penney sold a maternity bathing suit top for a “sale” price of $31.99 (later $21.99 and $14.99), down from an “original” price of $46. But it never cost $46 in the first place, the suit alleges. The highest price it ever sold for was $31.99. This dishonest practice was repeated on items big and small at all four big box stores.
“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,” said Feuer.
The lawsuit comes just in time for the holiday shopping season. Remember, folks: if it looks too good to be true, it probably is.