Los Angeles City Attorney Mike Feuer has filed lawsuits against four major retail chains, accusing them of artificially inflating the prices of some items so the discounts would appear larger when they put the items on sale.
Feuer is suing J.C. Penney, Sears, Kohl’s, and Macy’s, charging each have used a practice known as “false reference pricing” to make customers think they're getting a better deal than they actually are.
“Customers have the right to be told the truth about the prices they’re paying – and to know if a bargain is really a bargain,” said Feuer. “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.”
What was the actual original price?
The four lawsuits hinge on what the sale items originally sold for. Retailers often show an “original,” or “regular” prices and then compare that amount to the sale price. Feuer's complaints charge that inflation of the original price has been a major part of all four companies' marketing and business strategies.
The suits cite specific instances where all four retailers allegedly inflated the original price. The suit against JC Penney charges a February 2016 swimsuit went on sale at a discount when the original price was actually the same as the sale price.
Feuer charges Kohl's did the same thing a month earlier when it put a pair of belted cargo shorts on sale, allegedly at a 30% discount. The suits against Macy's and Sears made similar charges – the stores allegedly showed a high original price for a sale item, but had never sold the item for that higher price.
Feuer says California has strict laws when it comes to this sort of thing. Retailers are not allowed to advertise an “original” price unless it was the “prevailing market price” at least three months before the sale price appeared.
In his four lawsuits, Feuer claims inflating the reference prices was standard practice, alleging thousands of “sale” items were advertised at false reference prices.
The suits ask for injunctions to stop the alleged false reference pricing and civil penalties ranging as high as $2,500 for each violation.