Steve Madden Hit With Class Action Lawsuit Over Alleged Use of Inflated Reference Prices

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Steve Madden has been hit with a proposed class action lawsuit that alleges the footwear and apparel brand has advertised products as on sale from inflated reference prices to make it appear as though consumers are getting a significant discount.

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The 29-page false advertising lawsuit contends that Steve Madden uses a false price-discounting scheme both in its stores and online by displaying inflated strikethrough “original” or reference prices next to “sale” prices to create the impression that customers are receiving a special bargain. In reality, the suit says, many of the products are “almost always” sold at prices below the advertised reference prices.

According to the complaint, discount retailers frequently deploy inflated reference prices to “manipulate” consumer perception of their products. A higher original price communicates that the products are valuable and high quality and that consumers are getting a bargain, which induces them to make a purchase, the filing says.

The case claims that Steve Madden “rarely, if ever,” sells its merchandise for the listed reference prices and simply uses them to increase the overall demand and prices of its products, which allows the company to turn a profit at consumers’ expense.

Even if the retailer had offered its merchandise for the advertised original prices in the past, California law requires that the reference price represent the prevailing market price in the same locality for the three months preceding the advertised discount, the lawsuit explains. Steve Madden’s reference prices were not bona fide former prices given its products are often on sale for many weeks, the suit alleges.

For example, in October 2024, the plaintiff purchased a pair of “Bouquet Black Satin” shoes from the Steve Madden website for $59.97, with an advertised reference price of $79.95, per the complaint. The suit says that after reviewing the prices, the plaintiff believed that the shoes were worth the higher value listed and that she was getting a bargain.

However, an investigation by the plaintiff’s counsel using the Internet Archive’s Wayback Machine found that the shoes were never offered at the purported reference price in archived screenshots of the product page taken over time. For instance, on both July 15, 2024 and September 17, 2024, the shoes were available online with the same sale price of $59.97 from an advertised $79.95 reference price, per the case.

Retailers like Steve Madden benefit “substantially” from fake discount schemes because consumers do not have access to “complete” information about products they are buying and therefore must rely on pricing information from sellers to determine a product’s value and decide whether to make a purchase, the case says.

“[Steve Madden] seeks to capitalize on these known and proven effects of false price comparisons by advertising perpetual (or near perpetual) discounts from false reference prices to entice consumers into buying products that they would not otherwise purchase and/or to pay more than they otherwise would, absent the false discounts,” the lawsuit summarizes.

The Steve Madden class action lawsuit looks to cover all individuals who, while in California and within the applicable statute of limitations preceding the complaint’s filing, purchased from Steve Madden’s brick-and-mortar stores or website one or more products at a discount from an advertised reference price and who have not received a refund or credit for their purchases.

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