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Old Navy Deceptive Pricing Case Settled

In 2019, we reported that a Washington state consumer was suing Old Navy for advertising phony discounts from artificially high regular or original prices. [See complaint.] Now, lawyers announced they have reached a tentative settlement subject to court approval. No details of the settlement were released, but some type of payment to affected shoppers is likely, along with some guidelines on future advertising of discounts.

Lawyers for the consumer really prepared for this case by tracking millions of prices on the Old Navy website for two years, and found that those items virtually never sold for the stated full, regular price. Since most merchandise at Old Navy is their own brand, the company sets its own inflated list/regular/original price on their goods thus making their current sale prices seem like bigger bargains than they really are.

*MOUSE PRINT:

Old Navy Pants

As an example from Old Navy’s website earlier this year, the crossed-out price of $34.99 allegedly was rarely if ever charged, so shoppers are being misled into believing that they will save over $22 on this item if purchased now.

We’ll post information in Consumer World on how to file a claim in the Old Navy when the settlement is finalized.

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Lowe’s SpringFest Grill Deal Only Looked Smoking Hot

R.M. of Connecticut wrote to us last week complaining about a Lowe’s TV commercial that featured quite a deal on a Weber grill during their first ever SpringFest event.

Lowe's Weber grill

This was exactly the three-burner Weber grill she was looking for, and she knew they were normally over $500. However, R.M. discovered that $379 was not the actual sale price for this model but only by freeze-framing the commercial on her 60-inch HDTV so she could read the fine print.

*MOUSE PRINT:

Lowe's starting at

Lowe's real price

The real price of this unit was more than double the price shown on the screen, and that was only disclosed in tiniest of print for less than four seconds. The big print $379 price was actually for a lower-end unit and only for a two-burner model at that.

Under state consumer law, such as the one in Massachusetts, pictorial misrepresentations are just as deceptive as verbal ones.

No advertisement shall be used which would mislead or tend to mislead buyers or prospective buyers, through pictorial representations or in any other manner, as to the product being offered for sale.

We wrote to Lowe’s three times asking why they would run such a misleading ad, and how it might avoid similar issues in the future. The company did not respond and that says a lot.

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Amazon Agrees to Savings Claims Disclosures to Settle DAs’ Lawsuit

In March, a group of pro-consumer California district attorneys sued Amazon about misleading savings claims, and settled the case just one week later. Amazon agreed to pay a $2-million penalty.

For decades, Amazon has advertised fictitious savings from bogus reference prices like “list prices” or “was” prices, making shoppers believe they were saving a bundle by buying from them. In 2017, we reported on a study that demonstrated Amazon was still up to its old tricks despite seemingly having found consumer religion the year before as a result of several lawsuits about their misleading savings claims.

As a current example, in late March 2021, Amazon advertised a Cuisinart hand mixer (HM-90S) for $79.95 — a claimed savings of 45% off the so-called “list price” $145.

Amazon- Cuisinart mixer

But a quick check over at the manufacturer’s own website reveals that Cuisinart itself is selling this very model for the same $79.95, as are a host other big name retailers.

*MOUSE PRINT:

Cuisinart retailers

Worse, Amazon itself has never charged more than $88.94 in the past 10 years for this mixer according to CamelCamelCamel, and a review of the prices being charged for this very mixer at nearly 100 other retailers reveals that no one is charging Amazon’s claimed $145 list price.

As of April 2, surprise, surprise, Amazon actually changed its advertising for this mixer and eliminated the misleading list price:

Changed Cuisinart mixer

UPDATE: Eagle-eyed reader Kim W. visited Amazon on April 5, and discovered the company once again began advertising a savings of 45% for this mixer and it restored the same high list price albeit this time with a “details link” explaining how it was derived.

Under the terms of the just-announced settlement, Amazon is barred from using false or misleading reference prices, and it must include a hyperlink to a “clear and exact definition of the [reference] term” they used and a “statement that the List Price may not be the prevailing market price or regular retail price.”

Our view: Having Amazon tell customers that the reference price they display is not the real prevailing price in the marketplace does nothing to change the misleading nature of their list price savings claims. And it seems to violate the very California law that formed the basis of the DAs’ lawsuit against the company.

Bottom line: If the list price is not the price charged by a reasonable number of sellers, it should not be allowed to be used.