Stein Mart Class Action Says ‘Compare At’ Prices Deceive Shoppers

A California man says Stein Mart has been deceiving customers with an unlawful pricing strategy.

Plaintiff Anthony Morales claims Stein Mart Inc. prices its merchandise using a deceptive scheme that makes customers think they’re getting more value than they actually are.

According to Morales, Stein Mart marks certain merchandise with two different prices. One price, identified as “Our Price,” is the actual price for which Stein Mart is offering the item for sale.

The other price, identified in Stein Mart advertising as the “Compare at” price, is higher than the marked “Our Price.”

This “Compare at” price is purportedly the item’s original, full retail price for which it has been offered for sale elsewhere.

Morales claims this “Compare at” price is a sham. He says Stein Mart makes up the “Compare at” price so that when shoppers compare it to the lower “Our Price,” they get the impression that the merchandise is offered for sale at a significant discount.

That impression of a deep discount spurs customers to buy more merchandise, under the impression that they’re getting a much greater value for their dollar, Morales claims.

According to the Stein Mart class action, merchandise priced this way was never seriously offered for sale at the “Compare at” price. The sole purpose of the “Compare at” price is to deceive shoppers into thinking they’re getting a bargain when they’re actually not, Morales claims.

This pricing scheme violates California consumer protection laws, according to the Stein Mart class action lawsuit.

Under California law, a price advertised as the former price must have been the prevailing market price within three months immediately preceding the advertisement, or the date on which that price prevailed must be “clearly, exactly and conspicuously” stated in the advertisement.

Morales says this pricing also contravenes pricing guidance issued by the FTC.

According to the FTC’s pricing guide, when a merchant advertises a discount from a purported retail price like Stein Mart’s “Compare at” price, that merchant should be certain the higher price “does not appreciably exceed the price at which the prevailing price and/or substantial sales of the article are being made in the area.”

Morales says he made purchases of his own based on Stein Mart’s pricing strategy. Among other purchases, he says he bought a Southern Pines-brand shirt for $34.99 marked with a “Compare at” price of $79.50.

He points out that Southern Pines is exclusively a Stein Mart brand. There are no other retailers at which his shirt could have been offered for sale at the advertised “Compare at” price, proving that the price is fictional, Morales says.

Morales proposes to represent a plaintiff Class that would include all persons in California who within the applicable statute of limitations period purchased any product from a Stein Mart retail store that was marked with a “Compare at” price tag.

He is asking for injunctive relief that would remedy the effects of Stein Mart’s allegedly unlawful conduct. He also seeks an award of damages, restitution, disgorgement of profits, court costs and attorney’s fees.

Morales is represented by Reuben D. Nathan of Nathan & Associates APC.

The Stein Mart “Compare At” Pricing Class Action Lawsuit is Anthony Morales v. Stein Mart Inc., Case No. 5:17-cv-00159, in the U.S. District Court for the Central District of California.