Amazon Misrepresents List Prices, Class Action Says

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An Amazon.com Inc. class action lawsuit alleges that the online retailer deceives its customers into thinking that they are receiving great discounts by misrepresenting the “list price” of its products.

According to the Amazon class action lawsuit filed by Plaintiff Andrea Fagerstrom on Nov. 25 in a California Superior Court, the products that Amazon sells on its website show both the list price and the discounted price as well as what the savings are to the customer by the dollar amount as well as the percentage of their savings.

But Fagerstrom alleges in her Amazon deceptive marketing class action lawsuit that the manufacturer’s suggested retail price (MSRP), or “list price,” that Amazon uses is the highest price that the product has ever been listed for, not the current price that the product is being sold for in local brick-and-mortar stores.

The Amazon class action lawsuit charges the online retailer with violating California’s False Advertising Law, which states that the displayed list price must be based on what the prevailing market price has been over the past three months.  Another option is for the retailer to include the date associated with the list price it uses.

According to the deceptive marketing class action lawsuit, Amazon deceives its customers by “cherry picking” the highest price so it can show the deepest discounts by comparison.

Fagersrom alleges that she fell prey to this marketing strategy when she purchased a blender from Amazon, which was listed for $329, with an apparent nine percent discount, which brought the price of the product down to $299. However, she discovered that the same blender is listed for $299 at other retailers because that is its actual market price.

The charges against Amazon in the deceptive marketing class action lawsuit include business fraud, unfair trade practices, false representation, and deceptive advertising.

According to Fagerstrom, Amazon is the largest online retailer, bringing in more than $44 billion per year.

An Amazon Prime class action lawsuit filed in February alleges that the online retailer encourages third-party venders who use Fulfillment by Amazon (FBA) services  and sells those products to Amazon Prime member, which gives customers free shipping, to include the shipping costs in the price of the product to offset such costs so that Amazon can “maximize total revenue and profit margins.”

Amazon has filed a motion to have the class action lawsuit dismissed and it has asked the court to compel arbitration over the matter, saying that customers agree to arbitration according to the terms and conditions under the Amazon Prime user agreement.

The plaintiff is represented by Trenton Kashima of Finkelstein & Krinsk.

UPDATE: The Amazon list price class action lawsuit was dismissed on Oct. 20, 2015 after a judge found that the plaintiffs were bound by Amazon’s arbitration agreement.

UPDATE 2: On Feb. 29, 2016, Allen Wiseley asked the 9th U.S. Circuit Court of Appeals to review a district court’s decision to enforce an arbitration agreement in this Amazon list price class action lawsuit.