Alleging deceptive pricing practices
One of the most gratifying aspects of shopping is going into one of your favorite stores and seeing that an item is one sale for a significantly lower price than it is normally sold at. The art of the sales discount has been shoppers’ siren song for decades, even though many know that the original advertised price has been marked up in order to make shoppers feel that the discount is a great deal.
However, a shopper in California is seeking legal recourse against Kohl’s for what he alleges is deceptive price representation. The case was dismissed in 2010 by the U.S. District Court, but the 9th Circuit Court of Appeals reversed that decision last week.
“Price advertisements matter,” Judge Stephen Reinhardt wrote for a three-judge panel. “When a consumer purchases merchandise on the basis of false price information and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue.”
Marking items up so discounts are void
The shopper, Antonio S. Hinojos, argued that Kohl’s advertised 50 percent off of its originally priced $299 Samsonite luggage, and discounts on Chap polo shirts were misleading because the sales price came out to be what these items would normally sell for. By substantially marking up items in order to then slash prices through discounts, it can be argued that retailers deceive consumers on the original value and quality of the items being sold.
To provide an example, if consumers think they are receiving a deal because of a discount, buy those items and then try to sell them for the original price, they would find that they would not recoup that original sticker value because it was highly marked up, thereby losing money.
If the court ultimately decides against Kohl’s and implements these restrictions for other retailers as well, it will dramatically change the way that stores conduct sales. Perhaps at that point, more stores will have to implement JC Penney’s recent experiment of doing away with sales and regularly offering lower prices overall. Shoppers have been trained to chase markdowns, but now, they may have to get used to less drastic price slashes.