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Kate Spade Outlets False Reference Pricing Class Action

Are the items for sale at Kate Spade outlet stores really discounted by as much as the tags say? The complaint for this class action alleges that the company creates false reference prices in order to make consumers think they are getting a bigger bargain than they actually are.

The class for this action is all persons in California who bought one or more products from Kate Spade outlet stores that were discounted from the advertised “Our Price,” between February 15, 2015 and the present, and who have not received a refund or credit for the purchase.

Consumers believe that outlet stores sell merchandise that was left over from the main stores and that is now being sold at a deep discount. However, this is often not true. Many clothing brands make a second line of cheaper-quality clothes to stock their outlet stores. They then put a false “original price” or reference price on the sign or tag and proclaim that customers are getting a deep discount. 

At Kate Spade outlet stores, the reference price is listed on the tag as “Our Price,” implying that that was the original price at which the item was offered in Kate Spade main stores. After that on the tag comes another price much lower than that; the rack usually bears a sign proclaiming a certain percentage reduction, such as “70% Off.” 

However, the complaint says that the reference price is fictional and that the merchandise at Kate Spade outlet stores was never offered at that price. It says that the items on sale at the outlet stores was made specifically for the outlets and never sold anywhere else. The only point to the false price, the complaint says, is to make consumers think that they’re getting a large discount. 

The Federal Trade Commission’s Act forbids “unfair or deceptive acts or practices in or affecting commerce” include false reference pricing. It specifies, “If … the former price being advertised is not bona fide but fictitious—for example, where an artificial or inflated price was established for the purpose of enabling the subsequent offer of a large reduction—the bargain being advertised is a false one; the purchaser is not receiving the unusual value he expects.”

California’s False Advertising Law says, “No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price … within three months next immediately preceding the publication of the advertisement…” 

The complaint alleges that the company has violated California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Kate Spade Outlets False Reference Pricing Complaint

February 15, 2019

Are the items for sale at Kate Spade outlet stores really discounted by as much as the tags say? The complaint for this class action alleges that the company creates false reference prices in order to make consumers think they are getting a bigger bargain than they actually are.

kate_spade_false_ref_pricing_compl.pdf

Case Event History

Kate Spade Outlets False Reference Pricing Complaint

February 15, 2019

Are the items for sale at Kate Spade outlet stores really discounted by as much as the tags say? The complaint for this class action alleges that the company creates false reference prices in order to make consumers think they are getting a bigger bargain than they actually are.

kate_spade_false_ref_pricing_compl.pdf
Tags: Deceptive Advertising, Deceptive Discount Offers