On August 2, 2017, the U.S. District Court for the Central District of California dismissed a putative class action lawsuit against Ross Stores that accused the discount retailer of misleading promotional pricing practices. The lawsuit stemmed from February and May 2015 purchases by the two lead plaintiffs of items bearing price tags with a selling

Yesterday, the Virginia Attorney General announced that it reached a settlement with Hobby Lobby over the retailer’s price comparisons. According to the press release, Hobby Lobby advertised discounts compared to “other sellers,” but failed to disclose the basis of comparison, thus making it difficult for consumers to determine whether they were getting a good deal.

Class action plaintiffs continue to explore new theories under state promotional pricing statutes. Last week, a plaintiff filed a class action complaint against Gap Inc. in California state court, alleging that the company violates several state laws by not adequately disclosing which products are excluded from an advertised sale. As a result, consumers make a

Last Thursday, four members of Congress sent a letter to the FTC Chairwoman expressing concerns that consumers are being deceived by pricing at outlet stores and asking the FTC to investigate potential violations of Section 5 of the FTC Act and the FTC’s Guides Against Deceptive Pricing. They noted that, unlike the historical practice

In the Overstock.com case described in the post yesterday, the plaintiff also argued that Overstock’s representations that shipping was “free” or “only $2.95” violated California’s False Advertising Law because the company factored the full cost of shipping into the underlying product price. The court ruled in Overstock’s favor, determining that the claim was “nonsensical,”

Still recovering from the holiday sales? If you’re a retailer or a manufacturer pricing your own products, don’t forget about the state laws governing promotional pricing and deceptive pricing claims. The state of California certainly hasn’t – on Friday, a California judge issued an almost $6.82 million civil penalty against Overstock.com via a tentative ruling and proposed statement of decision regarding the company’s comparative price advertising. The court also imposed stringent injunctive provisions regarding comparative price advertising. Yesterday, Overstock announced that it will appeal.

The complaint alleged that Overstock made false and misleading price comparisons to products’ “advertised retail price” (“ARP”), in violation of California’s False Advertising Law and Unfair Competition Law. Specifically, the state alleged that Overstock exaggerated the Overstock discount by referencing the highest price found for the ARP or constructing an ARP using a formula that applied an arbitrary multiplier to Overstock’s wholesale cost. Additionally, the company allegedly failed to disclose that some ARPs were based on the retail price of a similar, but non-identical, product. The court concluded that comparisons to ARPs identified as “list prices” and based on a formula or the price of a different, non-identical product were false and misleading representations, and every such ARP was an untrue statement because those ARPs did not actually exist. The court dismissed Overstock’s argument that its pricing strategy caused no consumer harm because customers always received the lowest price available on the internet, ruling that harm is presumed when an ad is demonstrated to be false, deceptive, or misleading.

Continue Reading California Court Imposes $6.82 Million Civil Penalty in Comparative Pricing Action

For marketers facing challenges to their promotional pricing strategies, a new ruling could bolster their defenses.  Earlier this week, a federal judge in New Jersey granted Jos. A. Bank’s Motion to Dismiss in a proposed class action alleging deceptive pricing.  The judge ruled that the plaintiffs failed to show specific unlawful conduct or actual loss

We’ve posted several entries about lawsuits involving continuous sales and promotional pricing. (Click here and here, for examples.) This week, the NAD announced a decision involving similar issues.

Lowes frequently advertises “10% Off Major Appliances” and includes an expiration date on the offers. The Home Depot argued that, despite the expiration date, Lowes promoted

This week, consumers filed a class action lawsuit against JoS. A. Bank, alleging that the clothing company engages in deceptive advertising by misrepresenting its regular and sales prices, in violation of New Jersey law.

The plaintiffs allege that JoS. A. Bank has promoted a continuous stream of back-to-back sales, and that by using phrases such

Yesterday the New York Attorney General announced that Michaels Stores, Inc., has agreed to pay $1.8 million to settle charges that the company engaged in deceptive advertising by misleading consumers about the existence of sales and discounts. Michaels is a retailer of arts, crafts, and custom framing that regularly advertises sales. The company will pay