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June 24, 2013 / Brandon Brouillette

Ninth Circuit Allows Claim to Proceed Where Plaintiffs Alleged They Were Duped into Spending More Money as a Result of a Retailer’s Advertising of False Markdowns

In a recent Ninth Circuit court decision, Hinojos v. Kohl’s Corp. et al, the Court faced the issue of determining whether customers had sustained an economic injury by a retailers advertising of false markdowns.  According to the Plaintiff’s theory of the case, Kohl’s, the national department store retailer, advertised items to be on sale and marked down from an original or regular price, when in fact the items were never sold at the listed original or regular price, creating the illusion that the items were more valuable than they actually were.

In response to the Plaintiff’s allegations, Kohl’s argued that each purchaser got the “benefit of the bargain,” or in other words, the value of the products they bought were the same as they paid, regardless of the inflated advertised original price. The Court disagreed, stating that “a product’s regular or original price matters” to some consumers as “it provides important information about the product’s worth and the prestige that ownership of that product conveys.”  Thus, quite simply, some customers may be willing to pay more for a product Kohl’s says has an original price of $99 than an equivalent product that Kohl’s says has an original price of $79.  The perceived value matters.

If you purchased a product as a result of a company’s false advertising and want to help make a difference against the prevalent practices companies embrace to take advantage of consumers, please contact the attorneys of Khorrami Boucher Sumner Sanguinetti, LLP for a free confidential consultation.

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