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The great deal with a sweater costing just $35 when it was priced previously for $100 might not be as great a deal and the customer needs to be aware of that, said Mike Feuer the City Attorney for Los Angeles.
The office of the LA city attorney filed lawsuits on Thursday against four large retailers claiming deceptive advertising that allegedly caused shoppers being misled into thinking that many products had hefty discounts.
The four retailers – Sears, Kohl’s, Macy’s and J.C. Penney – all allegedly advertised high regular or list prices on some merchandise that was not actually available at the price, according to court documents, in a practice referred to as “false reference pricing.”
This pricing is what allegedly led to customers believing they were receiving a much better bargain at the current sale price than what they were actually receiving.
Feuer said during a press conference that shoppers have a right to know about prices of products they are paying for. The shopper must be made aware of when sale prices are really sale prices and when bargains are really bargains.
Laws in California bar retailers from advertisements that show a higher original price unless the product was available at that original price within a period of 90 days from the time the advertisement ran.
Evidence that the attorney’s office had focused on gave them reason to believe the four retailers were carrying out the practice.
The four suits seek injunction to stop such pricing as well as civil penalties.
Retailers have been in trouble prior to this for false reference pricing. In 2015, Kohl’s and J.C. Penney received class action suits against them that accused the two of tricking their customers through inflating the original prices of sale products.
Eventually, J.C. Penney settled its suit for cash as well as store credit of $50 million to customers while Kohl’s agreed it would pay over $6.15 million.
Feuer said Kohl’s and J.C. Penney represented to the courts in those class action suits, they would no longer engage in schemes of false reference pricing. However, he added, we allege they continue doing so.
Sears, Macy’s and J.C. Penney spokespersons would not comment when reached, while a Kohl’s spokesperson could not be reached.