Many shoppers are lured to factory outlet stores like Levi’s Outlet Store with the prospect of obtaining brand name clothing at a discounted price, assuming that because the clothing is sold at an outlet store, they are purchasing the same retail store product at a significant bargain.
However, consumers who purchased goods at certain discount retail or factory outlet stores in California may have acquired items with fraudulent price labeling that violates state pricing and false advertising laws.
In California, it is illegal for a merchant to offer a discount off the “original” price and then artificially inflate that “original” price so that the discount is falsely exaggerated.
Some California outlet stores compound this problem by selling inferior knockoffs of their own product lines in their outlet stores, so a shopper thinks he or she is purchasing an item that was sold at the full-price retail store.
Due to these alleged deceptive practices, a fake sale class action investigation has been launched targeting these types of practices at California outlet stores.
California False Advertising Laws
Most consumers have, at some point, purchased merchandise from a California outlet store such as Levi’s, because the discount seemed too good to pass up.
Retailers, well aware of consumers’ susceptibility to a bargain, therefore have an incentive to lie to their customers by falsely claiming that their products have previously sold at a far higher “original” price in order to entice customers to purchase merchandise at a misleading marked-down “sale” price.
This practice is illegal in California and the state has enacted legislation to prevent stores from using these deceptive marketing practices. Under the California Fair Advertising law:
“No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price. . . within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement” (Cal. Bus. & Prof. Code § 17501).
What this essentially means is that factory stores like Levi’s Outlet Store are prohibited from advertising they have reduced prices on their merchandise when similar merchandise at their full-price stores retails for a comparable price.
Complicating this is the common practice of retailers to offer lower quality product lines, referred to in the industry as “made-for-outlets” or “made-for-factories,” in their outlet stores. These goods are generally coded to refer to items made with materials that are inferior to the quality of the products the retailer stocks in the non-outlet locations.
Additionally, California’s Consumer Legal Remedies Act provides a second, overlapping prohibition on advertising non-existent sales specifically forbidding “[m]aking false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions” [Cal. Civil Code § 1770(a)(13)].
California Outlet Stores Class Action Investigation
In August 2014, a false advertising lawsuit was filed in the California Superior Court in San Francisco against Levi Strauss & Co. that asserted claims of deceptive outlet pricing practices.
Similarly, many plaintiffs who have purchased clothing from factory stores like Levi’s Outlet Store under false pretenses have also invoked California’s Fair Advertising Law in their outlet store lawsuits. The core allegation in these lawsuits is that the customer at an outlet or factory store expects only out-of-season or excess goods previously offered at full-price retail stores.
Advertising that merchandise is on sale using a fictitious “original” or “MSRP” price is against the law. If you purchased clothing at a California outlet or factory mall, you may have a legal claim.
Join a Free California Factory Outlet Store Class Action Lawsuit Investigation
If you purchased clothing from a discount retailer or factory outlet store in California in the last two years, you may be the victim of a false advertising scheme. Some of the retailers being investigated in the potential false advertising class action lawsuit include:
- Barney’s New York Outlet
- Coach Outlet
- Cole Haan Outlet
- Levi’s Outlet
- Nike Outlet
- Northface Outlet
- True Religion Outlet
- Vince Outlet
- Other California outlet stores
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