Would you have bought it if it hadn’t been discounted?
A California woman claims she was tricked into buying an item she never would have purchased had she known it wasn’t really on sale. In a proposed class action lawsuit filed against New York & Company last week, the apparel manufacturer is accused of advertising false “original” prices on its heavily discounted products to dupe consumers into believing they are saving money.
The Misconception: Retail vs. Outlet
According to the suit, a reasonable consumer would believe New York & Company outlet stores sell, at discounted prices, products that were originally sold in the company’s retail stores.
In reality, however, the suit argues that New York & Company manufactures a completely different line of products to sell at its outlet stores. In its 2016 annual report, the company allegedly stated: "Outlet stores offer a merchandise mix consisting of apparel and accessories that is approximately 90% exclusive to the Outlet stores, and some merchandise that can be found at New York & Company and clearance merchandise."
According to the complaint, the “our price” listed on outlet store product tags was never actually offered in any stores, or was offered for an “inconsequential” period of time and then “continuously discounted.” The suit claims the reasonable consumer’s belief that he or she is paying less for a quality retail product is, therefore, false.
The Investigation: Which Price is Right?
The plaintiff’s counsel has allegedly been investigating pricing practices of San Diego County retail stores for two years. Investigators were secretly sent into stores to record prices and observe markdowns over a period of time, the complaint says.
As it turns out, the investigators claim that all the products in New York & Company’s outlet stores were discounted at all times. The prices on product tags were “fraudulent” prices that were never available to the public and were therefore misleading to consumers, the suit says.
For example, the plaintiff claims she purchased a top for approximately $13.47. The “our price” listed on the tag was $24.95, and the rack on which it hung advertised that it was 40% off, according to the complaint. The suit argues the shirt had never been sold for $24.95, and that the plaintiff was tricked into thinking she was buying it on sale. She says she never would have purchased it without the company’s “misrepresentations” about the deal she was getting.
The Reparation: Am I Covered in This Lawsuit?
The proposed class covers California residents who purchased one or more items from a New York & Company outlet store at a discounted price anytime between June 9, 2013 to the date of class certification.
The suit is seeking to award damages to proposed class members and grant injunctive relief prohibiting New York & Company from continuing its allegedly fraudulent business practices.