fbpx

Chico’s Outlets False Discounts California Class Action

In recent years, many brand-name stores have opened outlet stores in which customers believe they can buy merchandise from the main stores at deep discounts. But this is not always true. Some companies are offering direct-to-outlet lines and only pretending to offer deep discounts, to induce customers to think they’re getting a bargain. The complaint for this class action claims that Chico’s FAS, Inc. does this as well. 

The class for this action is all persons in California who, between May 7, 2015 and the present, bought from Chico’s outlet stores one or more direct-to-outlet products at discounts from the advertised “reference” price and who have not received a refund or credit for the product(s).

Customers love bargains. Steep discounts imply that merchandise is of better quality and worth more, and that customer are therefore getting more for less. In outlet stores, this is often indicated in two ways. First, signs may specify a false discount, telling customers that everything on a certain rack or in a certain area is “___% Off!” Second, individual tags may show an “original” or reference price and then a lower, “current” price.

However, in some cases, the reference or “original” price is false. The merchandise was never offered at that price. Instead, a line of clothing was created specifically for the outlet, of lower quality and intended from the beginning to be sold at the lower prices. 

The complaint claims that this is the case at Chico’s outlet stores. “The Chico’s outlet store merchandise is never offered for sale, nor actually sold, at the represented ‘reference’ price.” Instead, the complaint claims that the line of clothing at the outlets is made specifically for the outlets and never sold anywhere else. The complaint says, “Chico’s deceptive pricing scheme has the effect of tricking consumers into believing they are receiving a significant deal by purchasing merchandise at a steep discount, when in reality, consumers are paying for merchandise at its regular or original retail price.”

This is deceptive and forbidden by both federal and California laws.

The Federal Trade Commission (FTC) says, “If … the former price being advertised is not bona fide by fictitious—for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction—the ‘bargain’ being advertised is a false one.”

California law is even stricter, specifying, “No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement…”

The complaint claims violations of California’s Unfair Competition Law, False Advertising Law, and Consumers’ Legal Remedies Act.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Chico’s Outlets False Discounts California Complaint

May 7, 2019

In recent years, many brand-name stores have opened outlet stores in which customers believe they can buy merchandise from the main stores at deep discounts. But this is not always true. Some companies are offering direct-to-outlet lines and only pretending to offer deep discounts, to induce customers to think they’re getting a bargain. The complaint for this class action claims that Chico’s FAS, Inc. does this as well. 

chicos_false_reference_pricing_compl.pdf

Case Event History

Chico’s Outlets False Discounts California Complaint

May 7, 2019

In recent years, many brand-name stores have opened outlet stores in which customers believe they can buy merchandise from the main stores at deep discounts. But this is not always true. Some companies are offering direct-to-outlet lines and only pretending to offer deep discounts, to induce customers to think they’re getting a bargain. The complaint for this class action claims that Chico’s FAS, Inc. does this as well. 

chicos_false_reference_pricing_compl.pdf
Tags: Deceptive Advertising, Deceptive Discount Offers