J. Crew Faces Class Action Suit Alleging Misleading ‘Fake Sale’ Prices

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On Tuesday, J. Crew Group Inc. was hit with a proposed class action lawsuit alleging the clothing retailer dupes consumers into thinking they are getting great discounts by holding continuous sales on certain items with false original pricing online. The latest lawsuit joins a host of other lawsuits over “fake sales” that are currently pending in court.

Plaintiff Joseph A. D’Aversa claimed that the J. Crew factory store website ran sales almost daily on all of their online items, such as a “30% off everything” sale. However, D’Aversa claims, the online retailer has never offered the items at the full “valued at” price and has misled customers into thinking they were getting a discount on regular price items.

“Because defendants’ purported sale prices never end, but rather continue on a daily basis and are available anytime a customer visits the website, they are actually not discounted or sale prices at all, but rather constitute the everyday, regular prices of the items,” D’Aversa claimed.

D’Aversa stated that he purchased two sweaters online at the J. Crew factory website, believing he was getting 30 percent off of the original “valued at” price of the items. After his purchase, D’Aversa said he went back to the website over the following days and found that there was a 50 percent off sale for the same sweaters he purchased, plus an offer code for a 30 percent off coupon. D’Aversa claims that the pricing on the sweaters never came close to the “valued at” price that was listed on the items.

According to the claim, sales offers at J. Crew are advertised to only be valid for a limited time, sometimes a day, and other times a week. However, shortly after one sale ends, another follows right after, offering another discount, D’Aversa maintains. Though the sale prices do reflect a discount from the stated “valued at” price, the discounts mislead customers since the items were never actually listed at that full price, the complaint read.

The proposed Class in the lawsuit includes consumers who purchased any item from the J. Crew factory store website between Mar. 1, 2010 and the present. As a New Jersey resident, D’Aversa also seeks to represent a subclass of New Jersey consumers. The proposed class sizes are estimated to include more than 10,000 individuals.

J. Crew is one of a number of retailers who are currently facing “phantom markdown” lawsuits in the courts. The shoe retailer DSW inc. was targeted in December in a lawsuit in California federal court claiming its “compare at” prices were fictitious. Last month, Anne Taylor, Calvin Klein and Tommy Hilfiger were also hit with lawsuits claiming their markdowns were misleading.

Some retailers have already agreed to settle claims in proposed class action lawsuits over phantom markdowns. In the latter part of 2015,  Michael Kors agreed to pay $4.9 million, JC Penney settled for $50 million and Justice settled for $50.8 million to end false advertising “fake sale” claims.

D’Aversa is represented by Ross H. Schmierer and Stephen DeNippis of Paris Ackerman & Schmierer, LLP

The J. Crew Fake Sale Class Action Lawsuit is D’Aversa v. J. Crew Group Inc. et al., Case No. 1:16-cv-01590, in the U.S. District Court for the Southern District of New York.