Retailer Fraud and False Advertising

On January 26, 2011, the California Supreme Court confirmed that retailers' misrepresentations about the price of goods are actionable. Retailers must accurately label their products. According to the Supreme Court's decision in Kwikset Corporation v. The Superior Court of Orange County, when a consumer relies on the "truth and accuracy of a label and is deceived by misrepresentations into making a purchase, the economic harm is the same: the consumer has purchased a product that he or she paid more for than he or she otherwise might have been willing to pay if the product had been labeled accurately."

Retailers often use false comparison pricing to induce consumers to buy their products. They label products with reference prices, such as a "regular or original price" with a corresponding "sale price." Marketing research has consistently shown that reference or comparison pricing induces consumers to purchase products because they value the perceived deal. However, the reference prices that retailers use often are not based on any sales occurring at the regular price. In fact, the "sale price" is often the price that the product is regularly sold at in the marketplace. California law states that any original or regular price stated by the retailer must be the prevailing market price during the preceding 90 days.

Some examples of reference or comparison pricing that may result in false advertising or mislabeling are use of: a higher price that has been crossed out next to a lower price; "regular price" next to a "sale price;" "original" price next to "was"(supposedly representing a price it was offered for sale in the past); and a crossed out higher price with a "save %" with a lower price. These are just a few examples of retailers using comparison pricing that may be false or illegal. There are many more possible scenarios or ways that retailers can mislead consumers.

The Emge Firm, LLP represents consumers in false advertising class actions in California. We are currently litigating claims against national retailers including Kohl's and J.C. Penney. In addition, we are actively investigating false advertising /mislabeling claims against other retailers, including: Sears, Macys, Sports Authority, and Dick's Sporting Goods. If you have purchased goods on sale from any of these retailers, or any others, and still have your proof of purchase, please contact our office.