Hobby Lobby Class Action Claims Coupons are Misleading

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A proposed class action lawsuit alleges that the art and craft retailer Hobby Lobby Stores Inc., which has over 600 locations in 35 states, misleads consumers with its coupons.

The complaint states that customers who use a percentage-based coupon on items which are “always on sale” at Hobby Lobby do not get the full benefit of their coupons.

That is because Hobby Lobby stores calculate percentage coupons off the “regular” price, even for items that are never sold at that price, according to the lawsuit.

The Hobby Lobby misleading coupon class action lawsuit claims that “many items are ‘always’ on sale, but coupon discounts are taken from a price the item never sells at, which is most definitely not the regular price referenced in the coupon.”

The complaint continues, “Simply put, the ‘Regular’ price is the price at which an item is ‘regularly’ sold,” and asserts that Hobby Lobby’s practice of calculating coupon reductions from false “regular” prices is a violation of state consumer protection laws.

Plaintiffs David Phillips and Diane Browning allege that they did not receive the full value of a coupon used at Hobby Lobby stores. Phillips asserts that in October of 2015 he purchased “museum glass” at a Hobby Lobby store in Alabama. He says he used a 40 percent off coupon to buy the item. Hobby Lobby reportedly advertised the museum glass as “always 30% off” so it was $91 instead of $130. The class action contends that when Phillips used his 40 percent off coupon, he paid 40 percent less than the “largely fictional price” of $130, instead of getting 40 percent off the true regular price of $91.

Browning claims that she had a similar experience at the Hobby Lobby store in April of 2016. She allegedly downloaded a 40 percent off coupon to her cell phone, and used it to purchase a small chest. Since the chest was marked “always 30% off,” Browning asserts that she thought the coupon would give her 40 percent off the “sale” price of $202.99. However, the coupon gave her 40 percent off the “regular” price of $289.99, in essence giving her only 10 percent off the price at which the item is typically sold.

The Hobby Lobby class action lawsuit alleges that the retailer should know that its items marked as “always” on sale is misleading. In 2014, Hobby Lobby settled an action of the State of New York’s Attorney General and paid civil penalties over its “never ending” sales.

The plaintiffs seek to represent a Class of all persons “who purchased goods with a coupon at a Hobby Lobby location in the United States that were marked as ‘on sale’ but where a price higher than the ‘sale’ price was never charged for the goods, and the discount was taken off of an illusory, irrelevant price.” The class action requests damages and a court order stopping Hobby Lobby from calculating coupon discounts in this fashion.

Phillips and Browning are represented by Brian M. Clark of Wiggins Childs Pantazis Fisher & Goldfarb, LLC; Allan L. Armstrong of the Armstrong Law Center, LLC; and Darrell Cartwright of the Cartwright Law Center.

The Hobby Lobby Misleading Coupon Class Action Lawsuit is David Phillips, et al. v. Hobby Lobby Stores Inc., Case No. 2:16-cv-00837, in the U.S. District Court for the Northern District of Alabama, Southern Division.

UPDATE: On Oct. 21, 2016, a class action lawsuit accusing Hobby Lobby of misleading customers about its coupons has survived dismissal, according to court documents.