JC Penney Agrees to Massive Fake Sale Class Action Settlement

Retailer J.C. Penney agreed to a massive $50 million class action settlement to resolve allegations that they used fake sales to encourage customers to spend money. The effects of this settlement may ripple through both business culture and the legal system.

According to Time Magazine, “J.C. Penney has long been in the business of giving merchandise ‘fake prices.'”

When a new CEO took over for J.C. Penney in 2012, the company experimented with greater pricing transparency — with dismal results, Time reported. After this failed experiment, J.C. Penney alleged lapsed into their previous scheme of alleged “fake sales.”

This led to a fake sale class action lawsuit against J.C. Penney, alleging that the retailer engaged in a practice called price anchoring. This practice, which Time describes as widespread within the retail industry, amounts to marking an item’s price before a sale, to make the sale like a much deeper discount.

According to a lawyer for the plaintiffs, this practice is not necessarily illegal per se, but that the practice may be misleading to the point of deceptiveness. Allegedly, this practice creates a “false sense of urgency” that makes customers more likely to spend.

USA Today reported that J.C. Penney agreed to make $50 million available to settle claims that they had used fake sales to deceive its customers. The J.C. Penney class action lawsuit was originally filed in 2012 by California consumers.

Other retailers have adjusted practices based on public perception surrounding fake sales and allegedly aggressive marketing practices.

Though Time reported that price anchoring or “fake” sales is widespread, fake sale lawsuits are on the rise. Jos A. Banks faced a fake sale class action lawsuit back in 2012. Though this case was dismissed because the plaintiffs had trouble articulating the difference between the regular price and the sales price to the judge’s satisfaction, the company later announced that it would back away from “hyper aggressive promotional strategy.”

A spokesman for Jos. A Banks elaborated that this strategy had hurt the brand with consumers. On a related note, the Jos A. Banks fake sale lawsuit took place in New Jersey, while the J.C. Penny fake sale lawsuit took place in California. California is known for strict consumer protection laws, which may mean that fake sales class action lawsuits in California may have different outcomes from similar cases elsewhere.

A class action fake sale lawsuit investigation has been launched to explore allegations that big name retailers such as Best Buy, Kohl’s, Target, and Tiger Direct.

The J.C. Penney Fake Sale Class Action Lawsuit is Cynthia E. Spann v. J.C. Penney Corporation Inc., Case No. SACV12-0215 FMO (KESx), in the U.S. District Court for the Central District of California.

UPDATE: On Mar. 1, 2016, the J.C. Penney fake sale class action lawsuit settlement is now open to Class Members. Click here to file a claim or visit www.JCPenneySettlement.com.

UPDATE 2: Top Class Actions viewers who submitted timely and valid claims for the J.C. Penney class action settlement began receiving store vouchers ranging between $87.50 to more than $600! Congratulations to everyone who got PAID! 

Join a Fake Sale Class Action Lawsuit Investigation

If you purchased an item on sale at one of the following retailers in California, you may qualify to join a free class action lawsuit investigation:

• Best Buy
• Kohl’s
• Target
• Tiger Direct

Join Now