$197M Boohoo, Nasty Gal settlement resolves fake discount class action

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Boohoo settlement overview: 

• Who: Boohoo, BoohooMAN, Nasty Gal and PrettyLittleThing reached a $197 million settlement in the class action lawsuit.
• Why: Plaintiffs in the Boohoo settlement successfully claimed that sales on the websites were not actually sales because the reference prices were never real prices.
• Where: The federal court settlement is valid in the United States everywhere beside California.
• What are my options: Consumers looking for alternatives to Boohoo and Nasty Gal may be interested in products from Affliction.

Boohoo, BoohooMAN, Nasty Gal and PrettyLittleThing have reached a $197 million settlement with customers who claimed that the websites were selling items with a fake discount.

The plaintiffs claimed that the websites would advertise discounts from a reference price but the websites rarely, if ever, sold items at those reference prices, according to the Nasty Girl settlement.

The promotions, labeled as “50% off everything” or similar, would appear on the websites daily. The class argued that the labeling led customers to believe that they were receiving a large discount and the customers then would purchase items that they would not normally have purchased.

The Boohoo settlement requires the websites to post a disclaimer that the prices listed as reference prices are not based on former prices for the products but instead are based on the company’s opinion on what the full retail value of an item should be.

The Nasty Girl settlement agreement was filed in federal court in California.

Boohoo settlement will be paid in $10 gift cards, free shipping 

The class will receive the $197 million settlement in the form of $10 gift cards to the websites and will receive free shipping, which is estimated to be valued at $7.45 per customer. The gift cards are valid at any time, without blackout dates, and have no restrictions on transferring use, combining gift cards and more.

Class members who made purchases at more than one of the websites could receive multiple gift cards from the settlement. All class members who do not opt out will receive the gift card via email. The class is estimated to include 9.4 million individuals with 11.3 million gift cards expected to be sent out.

The settlement also awards $1,500 apiece to the representatives for the class, which the settlement states is far less than the 25% benchmark.

Boohoo and BoohooMAN, PrettyLittleThing and Nasty Gal all came to a $4.75 million settlement agreement to resolve a class action lawsuit that was nearly identical in California in September.

Have you purchased an item on discount that includes a price that was never used? Let us know in the comments.

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