News & Knowledge
Jos. A. Bank Faces Class Action Over “Never-Ending” Sale
Karen F. Lederer
Eric L. Unis
On April 5, 2012, two consumers filed a proposed class action in federal court in New Jersey against Jos. A. Bank, alleging that the men’s clothing retailer perpetually misrepresented its merchandise as being “on sale.” The lawsuit claims that the advertised “sale prices” were in fact Jos. A. Bank’s “regular prices” and that “nearly all” merchandise was sold at “sale price.”
The plaintiffs further allege that the sales were advertised as being of limited duration, which created a false sense of urgency for the consumer who believed that the price of the merchandise would increase back to regular price. The advertisements described in the complaint use expressions such as “Final Day!”, “2 Days Only!”, “Monday & Tuesdays Only!”, “Today Only!”, “1-Day Only!”, and “Final Hours!”
According to the complaint, each “sale” is followed by another “sale,” “sometimes offering the merchandise for a similar sale price, and the sale terms are just phrased differently.” The sales were advertised in television commercials, print advertisements, in-store signage, and through other means. The plaintiffs, both New Jersey residents, assert that Jos. A. Bank violated the New Jersey Consumer Fraud Act and seek to represent a nationwide class of consumers, or, in the alternative, a class of New Jersey consumers.
As noted in the complaint, Jos. A. Bank entered into an Assurance of Discontinuance with the New York Attorney General in 2004, in which Jos. A. Bank, consistent with the FTC Guides Against Deceptive Pricing, agreed not to advertise, or offer to sell, any items at a “sale” or discount from a purported “regular” or comparably-termed price unless that price is the actual, bona fide price at which the item was openly, actively, and regularly offered for sale by Jos. A. Bank, for a reasonably substantial period of time, in the recent, regular course of its business, and not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based.
Last year, arts and crafts retailer Michaels Stores also entered into a $1.8 million settlement with the New York Attorney General to settle allegations that its “never-ending” sales were fictitious former price claims.
The filing of the case against Jos. A. Bank is a reminder to retailers that sale price claims may grab the attention of the plaintiffs’ class action bar, as well as government regulators.
© TROUTMAN SANDERS LLP. ADVERTISING MATERIAL. These materials are to inform you of developments that may affect your business and are not to be considered legal advice, nor do they create a lawyer-client relationship. Information on previous case results does not guarantee a similar future result. Follow Troutman Sanders on Twitter.