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False “On Sale” Claims Illegal in California

Have you ever triumphantly purchased a product advertised as “on sale” at what you thought was a discounted price, only to learn that the supposed “sale” price was just as high as, if not higher than, what other stores were charging?  If you live in California, the store that falsely advertised that product as “on sale” could be liable for consumer fraud.

The Ninth Circuit Court of Appeals issued an opinion in Hinojos v. Kohls on May 21, 2013, holding that a California consumer who purchases merchandise based on a false advertisement regarding a sale has standing to sue the store that made the false advertisement.  The Court recognized that misinformation about a product’s “normal” price is significant to many consumers.  It reasoned that retailers know that consumers love a bargain and thus have an “incentive to lie to their customers by falsely claiming that their products have previously sold a a far higher ‘original’ price in order to induce customers to purchase merchandise at a purportedly marked-down ‘sale’ price.”

This is an important decision, rejecting the position asserted by retailers that their consumers are not harmed by these types of misrepresentations.

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