Retailers’ Deceptive Price Anchoring Practices Lawsuit

Sacramento Deceptive Anchoring Practices Lawyer

Kershaw, Cook & Talley is investigating retailers’ deceptive “price anchoring” practices. National retail giants such as TJ Maxx and J.C. Penney are in deep water following allegations they are engaging in false advertising practices wherein the retailer labels an item with an inflated “original” price in order for the “sales” price to appear desirable to consumers. This deceptive sales strategy is known as price anchoring. Plaintiffs claim the “original” price is not the genuine price of the product, therefore misleading shoppers to believe that they are getting more bang for their buck, so to speak, for the “sales”. Despite protest from retailers, class action lawsuits are proceeding throughout the country.

A class action is a type of lawsuit in which one or more named plaintiffs sue on behalf of all members of a group who suffered from a common injustice. This recovers damages for the entire group without the need for each member of the group to file an individual lawsuit. These types of cases are vastly more efficient, and economical, than individual lawsuits. Many class-action lawsuits against retailers are consolidated in California federal court because of California’s stringent consumer-protection laws.

U.S. District Judge Fernando Olguin in Los Angeles certified the class action against J.C. Penney, which accuses the company of employing fraudulent pricing strategies throughout years of “pervasive” campaigning. In the complaint against J.C. Penney, lead plaintiff Cynthia Spann states she had purchased blouses at a sales price of $17.99, a 40% discount from the original price of $30. However, she discovered the prices of the blouses were never above $17.99 during the three months before her purchase. The case is Spann v. J.C. Penney Corp et al, U.S. District Court, Central District of California, No. 12-00215.

Cases involving retailers engaging in misrepresentation are nothing new. Previous lawsuits have been filed against clothiers such as Kohls Corp and Jos.A.Bank. Kohl’s Corp. was hit with a class-action lawsuit in California for allegedly using false price information. In the case, Hinojos v. Kohl’s Corp, plaintiff Antonio S. Hinojos alleged he suffered an injury since he made a purchase based on inaccurate and deceptive pricing tactics. The Ninth Circuit’s opinion states, “The panel applied the California Supreme Court’s holding in Kwikset Corp. v. Superior Court, 246 P.3d 877 (Cal. 2011), and held that when a consumer purchases merchandise on the basis of false price information, and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue under the Unfair Competition Law and Fair Advertising Law because he has suffered an economic injury.”

If you purchased merchandise with high-low pricing or fake pricing, contact us for a free case consultation at (916) 520-6639.

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