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| 1 minute read

Benefit of the Bargain? Courts Split on Harm in Fictitious Pricing Cases

Retailers vying for consumers’ attention often promote sales and discounted prices to make a sale. Lawsuits regarding how companies advertise such sales are on the rise, specifically when it comes to unsubstantiated reference prices or “illusory sales.” Courts, however, are split as to whether a mere violation is enough to support a viable claim under relevant consumer protection laws.

Recently, the New Jersey Supreme Court ruled against consumers in a class-action lawsuit filed against Aéropostale finding the consumers did not suffer an ascertainable loss as required under the law. In Robey v. SPARC Grp. LLC, consumers claimed the retailer advertised merchandise at sale prices, even though the merchandise was never actually sold at the original reference price. Despite the state attorney general filing an amicus brief on behalf of the plaintiffs, the court determined the consumers received “exactly what they knowingly purchased – functioning and usable pants, sweatshirts, and t-shirts”, and therefore had not suffered an ascertainable loss. 

A number of other state and federal courts analyzing whether plaintiffs suffered a cognizable injury due to allegedly deceptive pricing practices under similar consumer protection laws have come out the same. 

That said, not all defendants are able to prevail. For example, the Ninth Circuit in particular has allowed these types of cases to proceed beyond the pleadings stage. For example, in at least one case, the court concluded that a consumer sufficiently alleged an “ascertainable loss” due to their decision to purchase a product based on the seller’s misrepresentation as to the item’s price. 

Despite some successes, retailers should use caution when advertising sales and price comparisons. It is clear that these types of fictitious pricing cases, whether brought by consumers or regulators, are likely to continue.


advertising marketing & promotions, advertising & media, advertising disputes