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NY Mattress Retailer Agrees to End Fake Sales

March 15, 2005
New York Attorney General Eliot Spitzer today announced an agreement with an upstate mattress store chain to resolve an investigation into phony sales promotions.

Under the terms of the settlement, Liverpool-based Metro Mattress has agreed to reform its sales practices and offer restitution to dozens of consumers.

"Phony sales aren�t fair to consumers or competitors," Spitzer said. "My office is committed to enforcing the law and ensuring that commercial advertisements provide truthful information that allow consumers to make sound purchasing decisions and businesses to compete on a level playing field."

A ten-month investigation into Metro Mattress� sales practices since January 1, 2003 revealed that Metro Mattress conducted nearly continuous sales of various items. In addition, using advertising statements such as "You May Never See Savings Like This Again" and "Our Greatest Offer Ever," Metro Mattress created a false sense of urgency to convince consumers to make a purchase during the sale period when, in fact, the retailer continued to sell the item at the sale price after its so-called sale ended. Spitzer�s office also raised the concern that consumers were being misled into believing that they were receiving some type of discount or bargain.

A review of Metro Mattress�s records also confirmed that some mattress product lines were never sold at the so-called regular price. For example, during a seven-month period in 2004, one particular mattress set was on sale seven times. While hundreds of units of this set were sold at the discounted price, no set was ever sold at the regular price.

Under state law, an item can not be characterized as "on sale" and discounted from a purported regular price unless it has been offered for sale at the advertised regular price for a reasonable period of time, in the recent and regular course of business.

Spitzer�s investigation also revealed that Metro Mattress:

• Failed to label or tag its "on-sale" merchandise, making it difficult for consumers to identify which mattresses were discounted;
• Compared its so-called sale prices to fictitious prices of unnamed competitors; and
• Offered 10 percent off bonus coupons in its advertisements that were contradicted and nullified by a small print footnote.

In settling the case, Metro Mattress agreed not to advertise any item at a sale price unless it has actively and regularly offered the item for sale at its regular price in the recent course of its business.

In addition, Metro Mattress agreed to:

• Conspicuously identify those items that are on sale and clearly mark the price of all merchandise, regardless of whether it is a sale price or regular price, including affixing the price tag to the item;
• Not charge consumers more than the advertised sale price for merchandise sold during the advertised sale period;
• Never charge consumers more than the advertised regular price; and
• Cease using asterisks and small print footnotes to modify the principal message of an advertisement.

The company also has agreed to pay $130,000 in civil penalties and fines and approximately $28,000 in restitution to over 200 affected consumers who have already been identified. Individuals eligible for refund checks will be contacted directly by the Attorney General�s office. Refunds will range between a few dollars to as much as $900.

Consumers who wish to file a complaint against Metro Mattress should contact the Attorney General�s consumer help line at (800) 771-7755.

Metro Mattress operates 16 stores throughout much of Upstate New York, including: Albany, Auburn, Cicero, Ithaca, Liverpool, Oswego, Penfield, Rochester, Syracuse and Yorkville.

Spitzer recently settled similar investigations into fake sales with three other retailers: Kaufmann�s department stores; Jos. A. Banks Clothiers; and Bon-Ton department stores.

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