Macy’s, Bloomingdale’s Accused Of Inflating “Original” Prices To Make Discounts More Attractive

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Over the past several months, consumers have sued a number of retailers accusing them of advertising “false” original prices on discounted or outlet merchandise. Joining a list that includes Kohl’s and Kate Spade are Macy’s and Bloomingdale’s. 

Two shoppers, one in Florida and one in California, filed a class-action seeking lawsuit [PDF] against Macy’s Inc. — parent company of both Macy’s and Bloomingdale’s — alleging that these department stores misled customers by boosting pre-sale prices.

One plaintiff says she purchased a Lennox ornament for $17.99 after being enticed by the thought of saving significantly (about 70%) from the purported original price of $60. However, the suit claims that the ornament was never sold for $60 at Macy’s or other retailers.

According to the lawsuit, the retailers regularly use deceptive and misleading labeling and marketing of merchandise they sell at their retail locations, including outlet stores across the U.S.

The suit accuses the companies of misrepresenting the nature and amount of price discounts on products by “offering steep discounted off of fabricated, arbitrary, and false former or purported original, regular or ‘compare at’ prices.”

Specifically, tags for merchandise sold at the stores included prices that were artificially inflated and did not represent the true price at which the products were previously sold, or the market price for the item.

The merchandise also included tags or stickers on the labels, or signs above the display, that showed a purported discount off the false original, regular, or compare at price, the suit claims.

“In some instances, [the retailers] represented that the listed or original price was two or more times the manufacturer’s suggested retail price (“MSRP”), and then offered the item at a purported 50% or more discount price which was in fact the original MSRP,” according to the complaint.

In reality, the suit claims that the prices used by Macy’s and Bloomingdale’s were a sham.

“In fact, such items were not generally sold at the ‘original’ or ‘compare at’ price listed on their labels, or at least not a substantial number of such items, including not within 90 days of the advertised or represented original or compare at price,” the suit states. “The original, regular or compare at price listed on [the retailers’] products were and are prices chosen by to enable them to engage in their phantom markdown scheme.”

The suit seeks restitution and disgorgement, injunctive relief, and other costs that exceed $5 million.

[via Cincinnati Business Journal]

by Ashlee Kieler via Consumerist