Hobby Lobby Class Action Claims Sale Pricing is Designed to Trick Consumers

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A San Diego woman says retailer Hobby Lobby has been using false promises of nonexistent discounts to trick consumers into making purchases.

Plaintiff Christina Chase claims defendant Hobby Lobby has been using a pricing strategy that violates state and federal law.

According to her complaint, Hobby Lobby tags its merchandise with false “marked” prices, or reference prices, then offers the merchandise for sale at lower “discounted” prices.

“The result is a sham price disparity that misleads consumers into believing they are receiving a good deal and induces them into making a purchase,” Chase says.

The plaintiff alleges the “marked” price on Hobby Lobby merchandise is a “total fiction.” She believes the retailer intends to exploit consumer’s general interest in getting a good deal so that they will make purchases they wouldn’t have made otherwise.

“[C]onsumers often purchase merchandise marketed as being ‘on sale’ purely because the proffered discount seemed too good to pass up,” Chase claims. “Accordingly, retailers have an incentive to lie to customers and advertise false sales.”

The Hobby Lobby class action argues the pricing scheme described here violates California consumer protection law and is inconsistent with pricing guidance published by the Federal Trade Commission.

Chase’s deceptive pricing class action lawsuit includes photographs of merchandise and price tags allegedly taken at Hobby Lobby retail stores. In one such photo, an in-store sign promises that picture frames are “always” offered at 50 percent off the “marked” price. Other photos show similar signs offering furniture and fabric “always” at a certain percentage off the “marked” price.

Other plaintiffs have raised similar allegations against Hobby Lobby.

In May of last year, plaintiffs David Phillips and Diane Browning brought another deceptive coupon class action lawsuit against Hobby Lobby in a federal court in Alabama. They alleged that items Hobby Lobby advertised as being on sale were always offered at the purported sale price – making the supposed “sale” no sale at all. According to Phillips and Browning, these items were never offered at their advertised “regular” price, which was allegedly devised just to create a false illusion of a discount.

In Chase’s own Hobby Lobby class action lawsuit, she seeks to represent a plaintiff Class consisting of all persons who, within the state of California and from May 1, 2013 through the present, purchased Hobby Lobby-branded merchandise from Hobby Lobby at a discount from the “marked” price and who have not already received a refund for that purchase.

She is asking the court to bar Hobby Lobby from continuing the allegedly deceptive coupon scheme described here and to order Hobby Lobby to run a corrective advertising campaign. She also seeks an award of damages, restitution and disgorgement of profits related to the disputed conduct, and reimbursement of court costs and attorneys’ fees.

Chase is represented by attorney Todd D. Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLP.

The Hobby Lobby Deceptive Pricing Class Action Lawsuit is Christina Chase v. Hobby Lobby Stores Inc., Case No. 3:17-cv-00881, in the U.S. District Court for the Southern District of California.

UPDATE: On Feb. 8, 2018, a federal judge determined not to dismiss a Hobby Lobby false discount class action lawsuit, saying that it was possible for reasonable consumers to be misled by the store’s adverting.

UPDATE 2: On Sept. 28, 2018, the consumers in a class action lawsuit alleging false advertising once again overcame Hobby Lobby’s motion to dismiss the action.