Reference price litigation continues to roll through the consumer class action pipeline. The latest example is a new suit against Snapfish, which alleges the online retailer advertised products at steep discounts based on inflated “original” prices. The case, Haratyk v. Snapfish LLC, was filed in federal court in California and targets pricing representations on Snapfish’s website for products including photo books and other personalized items.

The Allegations

The complaint alleges that Snapfish advertised products using reference prices that did not reflect genuine regular prices. According to the plaintiff, the company displayed higher “original” or “regular” prices next to lower promotional prices in order to create the impression of significant savings. The lawsuit claims that the “former” prices were not the prevailing market prices within three months immediately preceding the publication of the advertisement, as required by California law. Instead, plaintiffs allege that Snapfish rarely, if ever, offered the items in question at the reference prices, misleading consumers into believing they were getting a deal.

The complaint asserts violations of several California consumer protection statutes commonly used in advertising cases: the California Unfair Competition Law, False Advertising Law and the Consumer Legal Remedies Act. Plaintiff seeks to represent a class of consumers who purchased products from Snapfish during the period when the allegedly misleading prices were displayed.

The Takeaway for Advertisers

“Fake discount” claims are not new, but they remain a favorite theory for plaintiffs’ lawyers and continue to generate new cases. Companies that rely heavily on promotional pricing should keep the following in mind:

• Reference prices should be real. If a product is advertised as “$50, now $20,” the $50 price should reflect a bona fide regular price or a price that was actually offered for a meaningful period of time.

• Avoid perpetual markdowns. If something is always on sale, plaintiffs will argue it was never really full price.

• Keep documentation. Companies should be able to demonstrate how reference prices were determined and when products were offered at those prices.

None of this is groundbreaking. But cases like the one against Snapfish are a reminder that discount advertising—particularly online—remains a steady source of consumer class action risk.