Bass Class Action Says Outlet Store Prices Are Deceptive

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AM Retail Group Inc., the parent company for G.H. Bass & Co., has been hit with a proposed class action lawsuit that accuses the company of using false and misleading advertising for products sold in its “outlet” or “factory” stores.

“’Outlet’ stores, also known as ‘factory outlets,’ are commonly understood by the public to be selling the same merchandise that the manufacturer sells at its retail stores, but at a discount,” the Bass class action lawsuit states.

However, many outlet stores today sell different merchandise than they sell at their regular retail stores without notifying consumers about this practice.

In response to this trend, the Federal Trade Commission issued a warning to consumers that merchandise sold at outlet stores may be manufactured specifically for the outlet stores and may be of inferior quality than the merchandise sold at non-outlet retail stores.

“While the FTC felt that the need to warn customers about the different, inferior products sold at outlet stores or factory stores, companies, such as Defendant, actually take advantage of the public’s misconceptions about outlets and falsely compare their inferior outlet products to the higher-end retail products sold in their non-outlet or non-factory store locations in order to induce customers to purchase the ‘discounted’ products,” the Bass outlet class action lawsuit alleges.

Plaintiff Maria Ramos says she purchased a pair of Bass shoes for $22.49 at an outlet store in Folsom, Calif.

According to her Bass outlet store class action lawsuit, the display indicated the original price of the shoes was $95. Ramos says that the $95 price had a red slash mark with the word “SALE” on top of it, and the price of $29.99 was displayed as the current sale price.

An additional 25 percent discount was applied at the cash register, she says.

The Bass class action lawsuit states that many other products at the store had similar signs indicating deep discounts from the original price.

The deep discounts represented by the red slash mark and “sale” price suggest these products are a bargain for consumers, enticing them to make purchases they would perhaps not otherwise make.

The “original” or “compare at” price listed under the so-called “sale” price is not reflective of the price of the merchandise sold at the Bass outlet stores, Ramos alleges. She says this price is a meaningless inflated price, and that any “savings” are illusory.

Further, the shoes purchased by Ramos at the Bass outlet store are actually not sold in normal Bass retail stores, according to the Bass class action lawsuit.

Ramos says that, when she made the decision to purchase the shoes, she believed she was receiving a significant value. She would not have purchased the shoes without the misrepresentations about the sale price, according to the Bass sale class action lawsuit.

By filing the Bass outlet class action lawsuit, Ramos seeks to represent a Class of consumers who purchased merchandise from a Bass outlet store in California (and who did not subsequently return the items).

She accuses AM Retail Group of violating California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act.

Ramos is represented by Gene J. Stonebarger and Richard D. Lambert of Stonebarger Law and Thomas A. Kearney and Prescott W. Littlefield of Kearney Littlefield LLP.

The Bass Outlet Store Class Action Lawsuit is Ramos v. AM Retail Group, Case No. 2:16-cv-01842, in the U.S. District Court for the Eastern District of California.