JCPenney Class Action Says Pricing Scheme Creates Illusion of a Discount

A Kansas woman is taking JCPenney to task for using allegedly false “original” prices to create the illusion of a discount.

Plaintiff Ann Cavlovic alleges defendant J.C. Penney Corporation has been marking merchandise with falsely inflated “original” prices.

When those prices are compared to the lower “discounted” or “sale” price for which the merchandise is actually offered, she claims they create a false impression of big discounts that don’t actually exist.

Cavlovic says she was taken in by this allegedly deceptive pricing scheme when she purchased a pair of gold earrings from a JCPenney store in September 2014.

The earrings marked original price was $524.98. After applying a 60 percent sale discount and an additional 25 percent promotional discount, she ended up paying $171.66 for the earrings, including tax.

However, when she got home and opened the packaging for the earrings, Cavlovic says she discovered a pricing insert that listed the earrings’ original price as only $225.

Cavlovic says that had the earrings’ actual purchase price been calculated based on that lower original price and the applicable discounts and sales taxes, she would have paid only $73.58 for them.

Instead, she says, she ended up paying more than double the correct price – all because JCPenney marked the earrings with a substantially inflated and false “original” price.

In her JCPenney class action lawsuit, Cavlovic alleges the retailer is committing similar acts of deceptive pricing as a way to induce customers to make purchases they would not make otherwise.

She alleges this pricing is the result of a company-wide strategy that has been in place since 2013, after JCPenney abandoned its failed “fair and square” no-discount pricing strategy.

Price reductions like these are specifically proscribed by Kansas consumer protection statutes, Cavlovic claims.

She also cites an FTC rule that says when a seller creates an artificial “original” price just so they can subsequently offer a large price reduction, the resulting “bargain” is a false one, and the purchaser is not getting the value they’ve been led to expect.

Cavlovic originally filed her JCPenney deceptive pricing class action lawsuit in December 2016 in a Kansas state court. JCPenney has since removed the action to federal court.

Cavlovic seeks to represent a plaintiff Class consisting of all persons who between Dec. 16, 2013 and Dec. 16, 2016 purchased from a JCPenney store in Kansas any private or exclusive branded items at a discount of at least 30 percent off and who have not received a refund or credit for their purchase.

She is asking the court for an injunction that would prevent JCPenney from continuing the actions complained of here. She also seeks an award of damages, pre- and post-judgment interest, attorneys’ fees, and any other relief the court sees fit to grant.

Cavlovic is represented by Bryce B. Bell of Bell Law LLC and by A. Scott Waddell of Waddell Law Firm LLC.

The JCPenney Deceptive Pricing Class Action Lawsuit is Ann Cavlovic v. J.C. Penney Corporation Inc., Case No. 2:17-cv-02042-JAR-TJJ, in the U.S. District Court for the District of Kansas.