You probably know that the various name-brand “outlet” or “factory” stores of the sort you find in tourist-trap outlet malls rarely if ever offer bargain priceson actual same-quality name-brand merchandise.

Last March, for example, the Federal Trade Commission noted that “much of the merchandise sold at outlet stores is manufactured exclusively for them, and may be of lesser quality than the merchandise sold at non-outlet retail locations.”

Suppose you want to buy a pair of trendy designer NameBrand jeans, which cost $80 in regular NameBrand retail stores. But if you visit the NameBrand Factory Store in your nearest outlet mall, you can buy a new pair of NameBrand jeans for only $40 … or can you?

Not necessarily. Chances are the Factory Store jeans are merely a cheap knockoff of the $80 NameBrand jeans you find elsewhere: at first glance they look identical, but closer inspection proves the factory store garment to be of objectively lower quality. The FTC offered a couple of examples of how that's done: “plastic might replace leather trim on a jacket, or a t-shirt may have less stitching and a lighter weight fabric.”

Even the labels are often different: the labels sewn inside the $80 retail jeans say “NameBrand,” whereas those in the $40 jeans say something like “NameBrand Factory Outlet” or “NameBrand Outlet Store.”

At least the outlet manufacturers, with their outlet-specific labels, are more or less honest about this: you're not buying NameBrand jeans, you're buying NameBrand Factory Outlet jeans.

Deceit alleged

However, a recently filed class action suit against Neiman Marcus claims that the company deceived consumers about the products offered for sale in its Neiman Marcus Last Call stores.

In theory, Last Call is supposed to be the clearance outlet for the entire Neiman Marcus chain: anything the regular Neiman Marcus stores can't sell within a certain time frame is heavily discounted (by Neiman Marcus standards, anyway) and offered for sale in a Neiman Marcus Last Call.

However, as Courthouse News Service reported on Aug. 11, a class action suit headed by lead plaintiff Linda Rubinstein claims that Neiman Marcus deceived Last Call customers by selling items that were never offered for sale in actual Neiman Marcus stores – although their price tags claimed otherwise.

Rubinstein's complaint, filed Aug. 7 in Los Angeles, allages that Neiman Marcus “labels its Last Call clothing with a tag that shows a markedly lower price from the 'Compared to' price which corresponds to the price that appears to be used in traditional Neiman Marcus retail stores,” according to court documents.

Rubinstein's suit also says that:

Defendant's Last Call clothing is actually not intended for sale at the traditional Neiman Marcus stores as the 'Compared to' pricing strategy suggests, but rather strictly for the Last Call store. Therefore, defendant's price tags on the Last Call clothing are labeled with arbitrary, inflated 'Compared to' prices that are purely imaginative because it was never sold at the traditional Neiman Marcus store and therefore can't be compared to any price. Thus the insinuated price is false and misleading.

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