Business of Fashion, Fashion Law

New Retail Lawsuit Over Phantom Sale Savings

New retail lawsuit over phantom sale savings

California shoppers have been filing class-action lawsuits against big-name department stores over fake markdowns made to cause phantom savings.

In January 2016, a new case was filed against Macy’s Inc. and its Bloomingdale’s subsidiary.Fashion law lawsuit over fake sales pricing - Phantom Sale Savings PostPhantom savings and phantom sales refer to fake sale pricing that includes price tags with false original or MSRP price tags.

See: Fake Sales to Make Sales

Can a court rule against a retailer over discount pricing?

The lawsuit, filed in U.S. District Court in San Francisco, describes specific purchases made by customers who were led to believe they were getting sales but actually bought products that were never sold at the “full price” listed at sale.

Kristin Haley, a customer of Macy’s in San Rafael, California, paid $17.25 for a dress with a supposed full retail price of $69. Because this item was never offered for purchase at full price nor was the full price the prevailing market price, Macy’s pricing here is being considered as false advertising.

The plaintiffs in this class-action lawsuit are asking for $5 million in damages. 

Although the specific instances of false sale labeling may seem trivial and inconsequential, the individual instances as a whole become expensive.

Special fashion law rules cover sale pricing.

California retail law rules are more specific than the federal rules.

The Federal Trade Commission stipulates that products have to be sold at regular prices for a “significant amount of time” before going on sale.

In California, stores must sell the items at the “prevailing market price” for a three-month period before putting them on sale.

The more stringent California regulation is likely the reason that so many of these class-action lawsuits are being filed in California.

Have you made purchases based on perceived savings via listed sale price?

Considering damages, fake sales pricing cases are compelling in court because complainants can point to specific dollar amounts.

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