A federal court in Washington State recently denied Old Navy's motion to dismiss a deceptive pricing consumer class action.
The plaintiff in the case claims that she visited the Old Navy website to shop for Christmas presents and “[n]early all of the products she viewed [on the website] were advertised as being discounted from a reference price." Based on these strike through prices, she claims she reasonably believed that the items were normally offered and sold by Old Navy at the higher advertised list prices, and “that the products were worth, and had a value of, the higher stated reference prices.” Believing she was receiving a “special bargain,” she purchased 21 items. After subsequent investigation by her counsel, however, Plaintiff alleges that she learned the products were never sold by Old Navy at the higher advertised reference prices.
In denying Old Navy's motion to dismiss, the court was persuaded by Plaintiff's argument that, had she known that the items had never or rarely been offered at the higher “original” price, she would have acted differently and/or would not have purchased the products from Old Navy, and found that inducing a plaintiff to spend money she otherwise would not have spent, based on a misrepresentation, is clearly a cognizable injury.
We'll see what happens as the case proceeds. In the meantime, what's the takeaway?
Deceptive pricing cases have exploded in recent years. And while we've seen an increase in retailer success in many of these cases (including against Old Navy parent company, Gap, in Rubenstein), it remains important to be cautious when representing a price as a benefit for consumers if the benefit is actually illusory.
The case is NEMYKINA v. OLD NAVY, out of the U.S. District Court for the Western District of Washington, Case No. 2:19-CV-01958 (2020).
"Old Navy invents inflated and fictitious list prices in order to enable it to advertise perpetual website-wide and store-wide 'sale' events and product discounts to induce customers to purchase its products. Old Navy’s marketing plan is to trick its customers into believing that its products are worth, and have a value equal to, the inflated list price, and that the lower advertised sale price represents a special bargain—when in reality and unbeknownst to the customer, the 'sale' price is approximately equal to Old Navy’s usual and normal selling price for the product.”