National Apparel Retailer Named in Class Action Lawsuit
On June 26, 2017, a group of New Jersey citizens sued Burlington Coat Factory ("Burlington") in a class action lawsuit alleging that the stores' merchandise tags includes a "Comparable Value" price that is misleading to the average consumer. The lead class members are Henry and Catherine Anderson, who have been regular customers of Burlington for more than 10 years.
The Andersons, and those similarly situated, allege that Burlington's price tag contains two prices. The first price is the higher of the two and is referred to as the "Comparable Value." The other is a lower purportedly discounted price that the item is being sold for and appears next to the words "Our Price." The Plaintiffs allege that the phrase "Comparable Value" is not defined and provides no context for the price stated. This, the Plaintiffs claim, is a representation to the average consumer that the item is actually being sold or was sold somewhere else for the "Comparable Price" but Burlington is choosing to sell it at a discounted price. They further allege that the average consumer is also led to believe that the true value of the item is the "Comparable Value" price on the tag.
Essentially, the Plaintiffs, contend that the "Comparable Value" prices are fictitious, inflated prices created by Burlington as a marketing tool specifically to induce the minds of the average consumer into believing that they are paying a discounted price for items of equal or comparable value and that the prices reflect those that are actually selling in the retail market place. The Complaint cites several statutes prohibiting "fictitious pricing" including New Jersey's Truth In Consumer Contracts, Warranties and Notices Act and the state’s Consumer Fraud Act.
The Complaint also includes allegations that Burlington's mailings and advertising of the upper range of discounts the retailer is offering – "up to 75% off," violates a New Jersey law requiring that the minimum range discount also be conspicuously included in retail advertising in the same size and character as the maximum range of discounts.
The Plaintiff's cites several years of consumer studies and authoritative literature; all of which conclude that comparable pricing enhances buyers' perceptions of a bargain and have a significant impact on purchasing decisions. The Burlington lawsuit follows several other similar class action lawsuits recently against national retailers for so called pricing schemes including Jos. A. Bank, The Gap, J. Crew.
The lawsuit is pending in the Superior Court of New Jersey – Camden Division.