Class Action Lawsuit against Gap and Banana Republic for Misleading Sales Tactics

Have you ever planned to make a purchase of an item solely because you thought it was on sale, only to find out at the cash register that the item is being sold at full-price? If so, you are not alone. Consumers in California have banned together to sue clothing retailers Gap Inc. and Banana Republic for allegedly using false and misleading advertisements to induce customers to pay full-price for items that they believed to be on sale. According to the complaints, sale signs and advertisements in both stores were unclear as to which items were being sold at discount and which items were being sold at full-price.

The class action lawsuits were brought on behalf of customers who met the following requirements: (1) saw a sale advertisement within the past 4 years offering a discount at a Gap or Banana Republic store in California, (2) shopped and purchased an item of clothing after seeing the advertisement, (3) purchased one or more items that was not discounted, and (4) did not have a have a Gap or Banana Republic credit card.

Both the Gap class action and the Banana Republic class action allege that the stores violated California’s Consumers Legal Remedies Act by intentionally deceiving consumers by failing to designate which items were excluded from the sales promotion. More specifically the Gap class action lawsuit, states that Gap uses misleading sales advertisements on clothing racks that include very small print such as “selected styles” which are not detectable until the customer checks out at the cash register. Banana Republic allegedly uses a different sales tactic by displaying ads in the storefront window that state announcements such as “TODAY ONLY- 40%OFF YOUR PURCHASE.” Plaintiffs in the Banana Republic class action contend that the storefront ads mislead customers by failing to state that the sale only applies to certain items.

According to Plaintiffs in the Gap Class Action Lawsuit, consumers are “psychologically committed” to purchasing items before they are informed that the items are being sold at full-price. Psychological commitment in shopping ensues after customers have vested their time and energy into making a selection that they believed to be on sale. According to the Gap Class Action lawsuit, by the time customers are advised at the register that the selected item is being sold at full-price, the price difference can be worth less than the effort that it took them to find, try on, and bring it to the register. By this point, the customer is already psychologically committed and cannot walk away from the purchase, despite the fact that they started shopping on the assumption that the item was on sale.

If you have shopped at a retail store in recent years, and purchased a non-discounted item that you believed to be on sale, you may be entitled to relief. Please contact Khorrami Boucher, LLP for a confidential consultation.