City of LA suing retailers over misleading prices

Sears is one of four retailers being sued by the city of LA / CNN Money

The Grinch just might be your local retailer this holiday season, at least that’s what the Los Angeles city attorney is claiming in several lawsuits being brought against four of the nation’s top retailers.

JCPenny, Kohl’s. Macy’s and Sears are being sued by LA city attorney Mike Feuer, with allegations of a “misleading and deceptive false price advertising scheme.”

The suits claim that the scheme played a big role in the stores’ marketing strategies and that the stores used false reference prices on thousands of products, according to a report on CNN Money. Feuer said that the retailers deliberately inflated original prices on certain items, misleading consumers into believing they were getting a better deal once the item was marked down.

“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 release.

The suit against Sears alleges the company advertised a front-loading washer with an inflated price of $1,179.99, yet Sears never offered the item for more than $999.99 online in the approximately six months after it was put up online for purchase. The claim against Macy’s alleges that the store make misleading claims on a pendant necklace being 75% off, claiming it was first made available for online purchase in May for $30 with an original price of $120. The necklace was never priced above $30 in the next five months.

The retailers have not commented on the suits, but California law prohibits retailers from advertising a price unless the item has been on the market for that price within the previous three months, or the date when it was being sold at that price is made clear to consumers.

Feuer wants injunctions to halt the retailers from continuing their false advertising prices, and he is seeking a civil penalty up to $2,500 for each violation.

Bah, humbug.

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.