Los Angeles City Attorney Mike Feuer on Thursday filed a suit against Macy’s, J.C. Penney, Kohl’s and Sears, alleging the retailers used false reference pricing schemes to mislead customers into believing that items were on sale for significant discounts.
“Customers have a right to be told the truth about the prices they’re paying — and to know if a bargain is really a bargain,” said Feuer in a statement posted on the city’s web site. “My office will fight to hold retailers responsible for their practices and to ensure consumers can make informed choices when spending their hard-earned money.”
The complaints, filed in California Superior Court, allege the retailers falsely claimed their merchandise previously sold at far higher “original,” “regular” or “list” prices in order to create a false sense of value and to persuade customers to purchase the merchandise at an allegedly reduced “sale” price. The suit also alleges that “misleading” and “deceptive” practices play a major role in the companies’ overall marketing and business strategies.
Under California Law, retailers cannot advertise the former price of an item unless that item sold for that price within three months of the advertisement, or unless the date when the former price did prevail is stated clearly in the advertisement. The suit claims that “thousands” of items were advertised at false reference prices and is seeking injunctions prohibiting the retailers from further deceptive practices. The suit also seeks civil penalties up to $2,500 for each violation.
The complaints cite several examples that the City Attorney’s office has been tracking for months. On Kohl’s web site in January 2016, a pair of belted cargo shorts was advertised for a reduced price of $35.99 from an original price of $60. The next month, a maternity swim top at Penney’s was advertised on its web site with an “original” price of $46 and a sale price of $31.99. In May, Macy’s allegedly offered a sterling silver cross pendant necklace with a sale price of $30, down from $120. The retailers could not be reached for comment at press time. The suit alleges that none of these items actually sold at the listed “original” prices.
It’s not the first time retailers have come under fire for misleading pricing. Both J.C. Penney and Kohl’s were the subject of class action lawsuits alleging similar practices. Penney’s settled its suit for $50 million on cash and store credit to customers, while Kohl’s agreed to pay $6.15 million.
A Sears Holdings spokesman declined comment Saturday citing active or pending litigation. A Macy’s spokeswoman declined comment Sunday, due to pending litigation, as did a J.C. Penney spokeswoman for the same reason Monday. Executives at Kohl’s did not respond to requests for comment.