The Children’s Place Will Pay $6.8M To Settle Fake Price Class Action

A class action alleging clothing retailer The Children’s Place duped customers with fake prices has ended with the company agreeing to pay $6.8 million.

Lead plaintiffs, Monica Rael and Alyssa Hedrick, alleged in their class action lawsuit that The Children’s Place used fake “original” prices to make consumers think they were getting a deal on “marked down” prices. The plaintiffs claimed that the kids clothing and other goods were never actually sold at the purported original prices.

“Plaintiffs allege that prior to August 2015, The Children’s Place employed a systematic advertising scheme of continuously discounting its merchandise at sale prices that were significantly lower than the ‘regular’ or ‘original’ price tag prices for its exclusive branded merchandise at its retail and outlet stores,” states the plaintiffs’ motion. “Plaintiffs further allege that the advertised discounts were nothing more than mere phantom markdowns because the represented ‘original’ price tag prices were false because Defendant rarely, if ever, offered for sale the merchandise at the purported ‘original’ prices.”

The Children’s Place class action lawsuit alleged that each plaintiff purchased items at The Children’s Place that had been marked down; however, the items had not been offered for sale within 90-days at the original price as required for mark downs under California law.

According to the The Children’s Place class action settlement, 800,000 vouchers worth $6 each will be distributed to Class Members totaling $4.8 million. Additional discounts may be offered depending on the number of Class Members who file a claim. Settlement documents say that, as a result, The Children’s Place could potentially pay up to $20 million.

“Defendant’s online store offers for sale a variety of girls t-shirts for $3.99-9.75, toddler leggings for $4.47-6.57, baby onesies for $4.97, and jeans for $7.99,” notes the class action plaintiffs’ motion for settlement. “Class Members ‘need not spend any of his or her own money and can choose from a large number of potential items to purchase.'”

The Children’s Place has also agreed to pay the plaintiffs’ attorneys’ fees and for advertising to notify Class Members.

A number of other retailers have been hit with similar class action lawsuits alleging that consumers are duped into thinking they are getting a great deal when retailers use fake reference prices, including Gap, Amazon, Burberry, and Burlington Coat Factory. Other major retailers have settled class action lawsuits over fake pricing scams, including Michael Kors and JC Penney.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The lead plaintiffs and Class are represented by Todd Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLP.

The Children’s Place Fake Pricing Class Action Lawsuit is Rael, et al. v. The Children’s Place Inc., Case No. 3:16-cv-­00370, in the U.S. District Court for the Southern District of California.

UPDATE: On Jan. 28, 2020, a federal judge granted preliminary approval of the $6.8 million settlement that ends customer claims that The Children’s Place uses fake sales to drum up business.

UPDATE 2: March 2020, The Children’s Place fake sale class action settlement is now open. Click here to file a claim.