DSW Class Action Says Pricing Strategy Deceives Customers

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A new DSW class action lawsuit accuses the shoe retailer of tricking consumers into thinking they’re getting a bargain that may not even exist.

Plaintiff Amy Evans says that some of DSW’s inventory consists of products purpose-made for exclusive sale at DSW stores, under certain DSW house brand names.

These brands include Kelly & Katie, Lulu Townsend, Poppie Jones, Audrey Brooke, and One Wink. All these brands are trademarked by DSW, according to the class action lawsuit.

DSW’s price tags for items sold under these brands include “Compare At” reference prices, Evans says. But since these “DSW Exclusive Products” are never sold through any other store besides DSW, Evans argues they have no real original price other than whatever price DSW offers them for.

According to DSW’s filings with the Securities and Exchange Commission, the company makes a point of keeping its merchandise at the same price from the time it arrives at the store until it gets moved into clearance rotation.

Therefore the price at which DSW first offers a “DSW Exclusive Product” for sale is the true original price, and any other marked “Compare At” price is a fiction arbitrarily created by DSW, Evans argues.

Language from DSW’s website shows that for at least some of its merchandise, the company has been generating its own “Compare At” prices, Evans claims. She says the company recently added language to its definition of “Compare At” stating “when an MSRP is not available, the COMPARE AT price is our estimate of other retailers’ ticketed prices for the same or similar items.”

Evans believes DSW uses this strategy to generate fake original prices for its “DSW Exclusive Products.”

The plaintiff argues DSW uses these “Compare At” prices to give customers the impression that the item is being offered at a bargain price, when in fact it’s not being offered at any discount at all. This illusory bargain induces consumers to make purchases they may not have made otherwise.

The deception extends to the receipts DSW gives their customers after a purchase, Evans says. She includes in her DSW class action lawsuit an image of a receipt showing the words “YOU SAVED $29.05” at the bottom, representing the purported discount on an item with a “Compare At” price of $60.

If certified by the court, Evans’s proposed Class will represent all residents of California who, within the applicable statute of limitations period, bought a “DSW Exclusive” product marked with both a higher “Compare At” price and a lower actual selling price from a DSW store.

The DSW class action lawsuit seeks restitution and disgorgement of profits DSW gained as a result of the practices complained of here, plus reimbursement of court costs and attorneys’ fees.

Evans is represented by Kristen Law Sagafi, Martin D. Quiñones, Hassan A. Zavareei, and Jeffrey D. Kaliel of Tycko & Zavareei LLP; Jeffrey M. Ostrow and Scott A. Edelsberg of Kopelowitz Ostrow PA, and by Wayne S. Kreger.

The DSW Fake Sale Class Action Lawsuit is Amy Evans v. DSW Inc., Case No. 2:16-cv-03791, in the U.S. District Court for the Central District of California.