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Misleading Pricing and False Advertising: A New Trend in Retail | The Fashion Law

Retailers that advertise sale prices in comparison with regular prices in California should ensure that the products were actually offered for purchase at those regular prices within the preceding three months, in order to avoid potential litigation. Los Angeles prosecutors have initiated lawsuits against J.C. Penney, Sears, Kohl’s and Macy’s for allegedly failing to do so, accusing them of misleading shoppers into believing they were buying items at more significant mark downs than they actually did.

According to the lawsuits at hand, the four retailers allegedly tricked consumers by falsely stating the original prices in connection with “sale” prices on thousands of products. The lawsuits cite claims of false advertising and unfair competition based on alleged violation of a California state law that prohibits advertising a former price unless it was “the prevailing market price” within three months before the ad runs, unless the ad “exactly and conspicuously” states the date when that price was in effect. California law also prohibits retailers from “making false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions.”

On the heels of the initiation of the aforementioned lawsuits, each of which were filed in Los Angeles County Superior Court and seek civil penalties as much as $2,500 for each violation and injunctions to stop so-called false reference pricing to increase sales, City Attorney Mike Feuer said in a statement, “Customers have the right to be told the truth about the price they’re paying – and to know if a bargain is really a bargain.”

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Misleading Pricing and False Advertising: A New Trend in Retail — The Fashion Law.