Newegg Inflated Pricing Class Action Lawsuit Revived on Appeal

Online retailer Newegg.com will have to face a previously dismissed class action lawsuit after a California appeals court revived the case.

The reinstated Newegg class action lawsuit accuses the company of tricking consumers into paying more by inflating prices on their website.

Lead plaintiff M. George Hansen alleges in the Newegg inflated pricing class action lawsuit that the online retailer uses fake prices to make consumers think they are getting a good deal on the electronics sold on the website.

“[T]hese advertised ‘discounts’ are completely illusory or grossly overstated,” alleges the Newegg class action lawsuit.

According to the Newegg inflated pricing class action lawsuit, the retailer holds itself out as a source for discounted electronic devices, like laptops and computers, as well as parts.

However, alleges the plaintiff, the discount prices Newegg advertises are “cherry picked” from the highest price the retailer can find or even a “work of fiction.”

“When advertising products on its website, Newegg displays the price at which it offers the product . . . as well as the ‘list’ price. This ‘list’ price is displayed in gray struck-through typeface (e.g. ‘$2099.99’) directly above [Newegg’s] offer price,” states the Newegg inflated pricing class action lawsuit.

“[Newegg] further advertises that the difference between this ‘list’ price and the offer price is some form of discount or purported savings (e.g. ‘Save: $200.00 (29%)’). Such presentation induces reasonable consumers into believing that the ‘list’ price represents either the product’s normal price on [Newegg’s] website and/or prevailing price in the market.”

The plaintiff claims that consumers do no better, and even sometimes worse, shopping on the Newegg website than they would have if they had gone to a regular retailer.

“This is because the ‘list’ price used to calculate the quantum of reported ‘savings’ is not the prevailing market price for . . . the same product from one of Newegg’s competitors or the price charged by Newegg for the subject item in the recent and normal course of its business,” alleges the Newegg inflated pricing class action lawsuit.

The Newegg inflated pricing class action lawsuit accuses the retailer of false advertising and deceptive marketing.

The plaintiff seeks to represent a Class of Newegg consumers allegedly duped by the deceptive price lists on the website.

The Newegg inflated pricing class action lawsuit is seeking damages, as well as an injunction against the alleged false advertising.

The retailer attempted to escape the Newegg inflated pricing class action lawsuit by arguing that because the items the plaintiff purchased off the site were not defective or damaged in any way, he had not suffered an economic injury.

The trial court in the matter agreed with the online retailer and dismissed the Newegg inflated pricing class action lawsuit. However, the plaintiff appealed, and the appeals court reversed the dismissal, reinstating the class action lawsuit.

Hansen is represented by Trenton R. Kashima of Finkelstein & Krinsk.

The Newegg Inflated Pricing Class Action Lawsuit is M. George Hansen v. Newegg.com Americas Inc., Case No. B271477, in the Court of Appeal of the State of California, Second Appellate District, Division Seven.