Shein sued over alleged fake discounts based on inflated reference prices

Shein class action lawsuit overview:

• Who: Three consumers have filed a class action lawsuit against Shein US Services LLC, Roadget Business Pte. Ltd. and Zoetop Business Co. Ltd.
• Why: The plaintiffs allege Shein used fake discounts to trick customers into believing they were buying items at a bargain.
• Where: The Shein class action lawsuit was filed in California federal court.

A new class action lawsuit accuses online retailer Shein of using fake discounts to trick customers into buying items they thought were on sale.

Lead plaintiff Stacee Severino filed the class action complaint against Shein US Services, Roadget Business and Zoetop Business on May 5 in California federal court, alleging violations of state and federal consumer laws.

According to the class action lawsuit, Shein, one of the world’s largest e-commerce platforms, systematically misrepresented to its customers that they were receiving substantial discounts on Shein-branded products.

“In fact, on information and belief, [Shein’s] products were rarely offered and likely never sold at the full reference price — including during the preceding six months,” the lawsuit says.

The plaintiffs claim Shein’s use of inflated reference prices and discounting led consumers to believe they were getting a bargain, resulting in billions of dollars in revenue for Shein at the expense of unsuspecting customers.

Shein allegedly uses fake discounts to drive demand

The class action lawsuit claims Shein’s deceptive pricing scheme involved advertising reference prices that were not the typical and regular prices charged by Shein in the recent past. As a result, consumers were misled into believing they were getting a genuine discount, the lawsuit says.

Severino also alleges Shein’s products had a market value lower than the promised regular price, and that the market value was also lower than the discounted sale price.

“By using false reference pricing, Shein artificially drives up demand for the products, and by extension drives up their price,” the class action lawsuit says. “As a result, consumers receive products worth less than the price paid.”

Severino claims consumers were deceived into spending money they otherwise would not have spent, purchasing items they would not have purchased and/or spending more on an item than they otherwise would have absent Shein’s deceptive marketing.

The class action lawsuit seeks to represent anyone in the United States who purchased one or more items from the Shein website or app at a discount from a higher advertised reference price.

The plaintiffs are suing for violations of California’s consumer laws and seek certification of the class action, damages, fees, costs and a jury trial.

Last year, a group of consumers filed a class action lawsuit against Shein, alleging the fast fashion retailer paid influencers to promote its products in an effort to deceive consumers.

What do you think of the allegations made in this Shein class action lawsuit? Let us know in the comments.

The plaintiffs are represented by Alexander E. Wolf and Gary M. Klinger of Milberg PLLC and Daniel O. Herrera and Christopher P. Dolotosky of Cafferty Clobes Meriwether & Sprengel LLP.

The Shein class action lawsuit is Severino, et al. v. Shein US Services LLC, et al., Case No. 3:26-cv-04062, in the U.S. District Court for the Northern District of California.

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