Kate Spade Class Action Says Shoppers Tricked by Deceptive Pricing

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Two shoppers allege in a class action lawsuit that Kate Spade uses deceptive pricing tactics to drive sales at its outlet stores.

Plaintiffs Daniel Irvine and Cheryl Anderson claim defendant Kate Spade and Co. marks merchandise in its outlet stores with fictional “original” prices, giving consumers the illusion of a discount when compared to the merchandise’s actual sale price.

The plaintiffs say this practice violates consumer protection laws of New York and Florida.

They also claim some Kate Spade outlet store merchandise was made specifically for outlet store sale and was never offered for sale at its advertised full price.

Store employees allegedly confirmed that these items are marked with a special four-character code, plaintiffs allege.

Irvine and Anderson further claim that, according to internal corporate documents from Kate Spade, the merchandise made for Kate Spade outlet stores “was of inferior craftsmanship and utilized different hardware, materials, logos and product demarcations.”

These internal documents allegedly show that Kate Spade created replicas of full-price retail items using lower-quality materials, then marked the replicas with a fictional former retail price to sell them at “illusive deep discounts.”

But the company never revealed the supposed lesser quality of these items, according to the plaintiffs. They say Kate Spade used the artificially inflated “our price” to create the illusion of a greater value.

Both Irvine and Anderson say they each purchased a handbag from a Kate Spade outlet store – Irvine in New York, and Anderson in Florida.

Both handbags were advertised at a 50 percent discount, with additional signage offering a 20 percent discount on top of that. The plaintiffs say they relied on Kate Spade’s representations of the handbags’ original price in deciding whether to buy the bags.

The Kate Spade class action lawsuit alleges this pricing practice violates the New York General Business Law and the Florida Deceptive and Unfair Trade Practices Act.

Irvine and Anderson also say this pricing practice by Kate Spade is inconsistent with guidelines published by the Federal Trade Commission.

According to the FTC, a “bargain” that is based on a fictitious former price is a false bargain, and in such a case the purported discount price for which the item is offered for sale is probably just the seller’s regular price for that item.

Use of this pricing strategy can be misleading to the consumer, the guidelines say.

Another Kate Spade class action lawsuit is already underway in a federal court in California. Plaintiffs there are raising similar allegations on behalf of consumers from California and Texas.

Irvine and Anderson propose to represent two plaintiff Classes, one from New York and the other from Florida, each of which would encompass consumers in those states who within the applicable Class period purchased Kate Spade merchandise from a Kate Spade outlet store at a stated discount of 20 percent or more and who have not received a refund or credit for that purchase.

They seek a court order forbidding Kate Spade from violating the New York and Florida statutes at issue. They also seek an award of damages, restitution, court costs and attorneys’ fees, with interest.

Irvine and Anderson are represented by attorney Noah Shube of the Law Offices of Noah Shube.

The Kate Spade Deceptive Pricing Class Action Lawsuit is Irvine, et al. v. Kate Spade and Co., Case No. 1:16-cv-07300, in the U.S. District Court for the Southern District of New York.