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A California consumer is claiming that Nasty Gal’s clothing website engages in a “profound and deceitful pricing scheme.”
Los Angeles-based Nasty Gal sells its branded women’s clothing, shoes and accessories exclusively through its own website. The company claims nearly 1 million active customers and boasts bargain prices.
On any given day, according to the class action lawsuit filed by Olivia Lee, a banner appears on the company’s landing page in bold capital letters touting massive site-wide discounts; but the “original” reference prices posted with the individual items usually are artificially inflated to mislead consumers.
Lee reports that she purchased a pair of sneakers on the Nasty Gal clothing website on a day when it advertised a “60% OFF EVERYTHING” sale.
The sneakers were displayed online with a reference price of $60 and a marked-down price of $24, making it appear that she was indeed getting a 60 percent discount, she states. With postage and packing fees added, she says she paid a total of $34.31 for her order.
However, the lawsuit alleges that the Nasty Gal sale price was fake.
Those sneakers had not been offered through the website at the reference price of $60 in the previous 90 days, if ever, Lee maintains.
Lee’s lawsuit cites the California Unfair Competition Law: “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 or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement.”
In addition, because the Nasty Gal clothing website is the only place its products are sold, the company cannot claim other retailers have sold them at higher prices, the plaintiff says.
Therefore, she alleges, Nasty Gal sales are “not really a sale at all. It is a scam.”
The lawsuit claims this is a common practice for the company. Nasty Gal deliberately uses inflated pricing to mislead consumers into believing they‘re getting a good deal, the filing states; and as a result, many will purchase more items or pay more for individual items than they might otherwise.
Moreover, sales receipts generated by the website show the amount that was purportedly saved through Nasty Gal’s “promotion.” This tactic is meant “to build goodwill to lure customers back for more fake promotions, sales and discounts,” the Nasty Gal class action lawsuit argues.
Nasty Gal sale prices “are not original, regular, retail, or former prices,” Lee maintains. “They are inflated prices posted to lure unsuspecting customers into jumping at a fake ‘bargain.’”
The Nasty Gal class action lawsuit cites numerous examples of scholarly research to illustrate the strategy behind such practices. A 1992 study published in the Journal of Public Policy & Marketing, for example, concluded that the higher the discount advertised, the greater a consumer’s perception of value becomes.
A 2002 research paper in the Journal of Consumer Affairs surmised that advertised reference prices greatly influence consumer perceptions of value. And a 2011 analysis in the Journal of Business Research says consumers often make purchasing decisions based on a retailer’s assurance of a good bargain.
The plaintiff is proposing that the court certify either a national or a California Class for this lawsuit. Either would include consumers who have purchased anything from the Nasty Gal website since March 1, 2017 — the day after the Nasty Gal clothing website and operations were acquired by U.K.-based Boohoo Group, which also is named as a defendant.
Both entities “aided and abetted, encouraged and rendered substantial assistance in accomplishing the wrongful conduct and their wrongful goals and other wrongdoing complained of herein,” she argues.
“Each of the Defendants acted with an awareness of its primary wrongdoing and realized that its conduct would substantially assist the accomplishment of the wrongful conduct, wrongful goals, and wrongdoing.”
Lee is claiming fraud, fraudulent concealment, unjust enrichment, and violations of California’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act. She is demanding a jury trial, seeking compensatory and punitive damages, court fees and “such other and further relief as the court deems proper.”
She also is seeking injunctive relief to put a stop to the allegedly fraudulent Nasty Gal sales. “Plaintiff seeks to put an immediate end to Nasty Gal’s deceptive advertising and marketing practices and recover restitution and damages on behalf of all persons who have fallen victim to Nasty Gal’s sham sales,” the Nasty Gal class action lawsuit states.
Plaintiff is represented by Yasin M. Almadani of Almadani Law and Ahmed Ibrahim of AI Law PLC.
The Nasty Gal Sale Class Action Lawsuit is Olivia Lee v. NastyGal.com USA Inc., et al., Case No. 2:20-cv-04659, in the U.S. District Court for the Central District of California.
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10 thoughts onNasty Gal Class Action Blasts ‘Fake’ Sale Pricing
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They are still running this scam. I had a screen shot of a coat I wanted and was waiting for it to go on sale the original price was $958. It’s finally on sale for 50% off and they raised the original price to $1258. They are still scamming after this settlement
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I fell victim to this alleged sale last night. I thought something seemed a bit after making the quick purchase (totaling $184) because the sale continued today when it was marked as just being yesterday (for 60 percent off) and then today suddenly it’s 50 percent off everything. I feel wronged .
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