Kate Spade Class Action Says ‘Our Price’ References are Fake

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A California shopper says she was tricked into thinking she got Kate Spade items at a discount based on the “Our Price” tags in its outlet stores.

Lead plaintiff Kristen Schertzer alleges in her class action lawsuit that Kate Spade & Company LLC uses false reference pricing so consumers think they’re getting a bargain.

“If everyone is getting a deal, is anyone really getting a deal?” asks the Kate Spade class action citing a 2016 New York Times article detailing the false reference pricing practice.

False reference pricing refers to instances where a company fakes a sale price on items. The items are marked with a so-called reference price that is much higher than the deeply “discounted” price on the sales tag. The practice becomes false when the item was never actually offered for sale at the reference price mentioned on the tag.

“Kate Spade utilizes a false and misleading reference price in the marketing and selling of Kate Spade branded and/or trademarked merchandise sold at its outlet stores,” alleges the Kate Spade class action lawsuit. “Kate Spade advertises its merchandise for sale by attaching a price tag to the item that sets forth a fictitious ‘reference price’ described by Kate Spade as ‘Our Price.’”

According to the Kate Spade class action lawsuit, items sold in Kate Spade outlet stores are specifically manufactured for that purpose. They are never offered for sale at retail stores and they are never offered at the reference prices listed on the tags, alleges Schertzer.

California law bars retailers from listing comparative pricing if the item has not been offered for sale at that price within the past three months, the plaintiff states.

“The law recognizes the reality that consumers often purchase merchandise marketed as being ‘on sale’ purely because the proffered discount seemed too good to pass up,” contends the Kate Spade outlet store class action lawsuit.

The plaintiff says that she and other consumers were harmed by the false reference pricing because they thought they were getting a deal on the Kate Spade merchandise.

“Retailers have an incentive to lie to customers and advertise false sales,” argues the Kate Spade class action lawsuit. “The resulting harm is tangible- the bargain hunter’s expectations about the product she purchased is that it has a higher perceived value and she may not have purchased the product but for the false savings.”

The Kate Spade class action lawsuit seeks to represent consumers who purchased Kate Spade items from outlet locations with allegedly false reference prices.

“Plaintiff seeks to halt the dissemination of this false, misleading, and deceptive pricing scheme, to correct the false and misleading perception it has created in the minds of consumers, and obtain redress for those who have purchased merchandise tainted by this deceptive pricing scheme,” states the Kate Spade outlet store class action lawsuit.

The plaintiff is represented by Todd D. Carpenter and Alyshia Lord of Carlson Lynch Sweet Kilpela & Carpenter LLP, and by Jeffrey Kaliel and Sophia Goren Gold of Kaliel PLLC.

The Kate Spade “Our Price” Fake Sale Class Action Lawsuit is Schertzer v. Kate Spade & Company LLC, Case No. 3:19-cv-330-AJB-JLB, in the U.S. District Court for the Southern District of California.