Costco class action claims retailer marks up online products

Costco online class action overview: 

• Who: Plaintiff Annie Song, a Costco member, is suing the wholesale retailer. 
• Why: Song claims the company falsely promises that it will disclose to consumers if items are cheaper in store than online on its website. 
• Where: The Costco online class action lawsuit was filed in a Washington federal court. 

A new class action lawsuit claims that Costco lies to customers when it claims it will always disclose when a product is more expensive on its website than in stores.

Plaintiff Annie Song filed the proposed class action lawsuit against Costco Wholesale Corp. on June 12 in a Washington federal court alleging violations of state consumer laws. 

Song, a Costco member, claims the company deceptively marks up products sold online at Costco.com, and fails to disclose this to consumers. She says that, on its website, Costco “explicitly promises” consumers it will disclose whenever a product is more expensive online than the same product offered for sale in-store.

“Despite its express representation, Costco routinely omits this material message and fails to disclose to consumers in those instances that they will be paying more for a product sold on Costco.com than if they had purchased the same exact product in-store at their local Costco Warehouse,” Song alleges.

Toilet paper cheaper in store, Costco class action says

Song says she placed an order for two-day delivery on Costco.com for various personal items that came to the total price of $145.52 in January. 

She says none of the products she bought in her order included the disclosure that they might be available at her Costco store at a lower price. However, Song now believes that several of the products she purchased on Costco.com for delivery were actually more expensive than if she had purchased the exact same items in-store. 

For example, Song bought a 30-Roll Count of Charmin Ultra Soft Bath Tissue for $33.49. At no point during her transaction on Costco.com did Costco disclose that the toilet paper might be available in-store at a cheaper price, she says. 

“However, the exact same 30-Roll Count of Charmin Ultra Soft Bath Tissue that Plaintiff purchased online cost only $29.99 at the Costco warehouse,” she says. 

Costco gains an unfair upper hand on competitors, lawsuit says

Song says she would not have made the online purchase if she had known that she could purchase the exact same toilet paper in-store for approximately $4 less than what she paid online. She says Costco fails to uphold its promise to consumers by “fraudulently omitting” its online product mark-up. 

“By failing to disclose the truth to consumers about its online product mark-up practices and the substantial price differential between identical items sold online and in-store, Costco deceives consumers and gains an unfair upper hand on competitors that fairly disclose their true pricing practices online,” Song says. 

As a result, she’s looking to represent anyone who made a purchase for delivery through the Costco mobile app or website and paid more for a product than was charged by Costco for the same product in-store when the online product page did not contain a disclosure warning consumers that the item may be available in-store for a lower price.

Song is suing for violations of state consumer laws and seeks certification of the class action, damages, fees, costs and a jury trial. 

Meanwhile, last week, Costco issued a recall for a pair of Tillamook cheeses after gray and black plastic pieces were discovered in a limited quantity of the products. 

What do you think of the allegations against Costco? Let us know in the comments!

The plaintiff and the proposed class are represented by Kim D. Stephens and Cecily C. Jordan of Tousley Brain Stephens PLLC and Sophia G. Gold and Jeffrey D. Kaliel if KalielGold PLLC.

The Costco mark-up class action lawsuit is Annie Song v. Costco Wholesale Corp., Case 2:24-cv-00845 in the U.S. District Court for the Western District of Washington. 

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