Giant U.S. clothing retailers The Gap and Old Navy are misleading shoppers by offering time-limited steep discounts on items sold online when they rarely, if ever, sell that clothing at regular prices, according to a proposed class-action lawsuit.
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The popular clothing stores offer the discount to “entice Canadians to purchase” products, the representative plaintiff, Michelle Hamaoui, alleges in a case filed in B.C. Supreme Court.
“Consumers are deceived into believing that the product they purchased is ordinarily offered at a higher price and has more value than it actually does,” according to the proposed class-action.
That violates Canada’s Competition Act, B.C.’s Business Practices and Consumer Protection Act, and other provincial consumer laws, it alleged.
Hamaoui, who purchased products from Old Navy’s Canadian website earlier this year, has filed the action on her behalf and on behalf of any person in Canada who bought one or more products through gapcanada.ca or oldnavy.gapcanada.ca at a discounted price since they began the practice, it said.
The class-action has to be certified by a judge before it proceeds.
The listed regular price is “usually struck through with a line” to indicate the items aren’t being sold at that price, but at a listed percentage discount, the case alleges.
The lawsuit includes a photo of a model wearing the “high rise cheeky straight jeans,” above the regular price of $119, with a line through it, and the discounted price of $47, with a line saying it’s “60 per cent off: limited time.”
The two prices and the amount of the percentage discount or the total savings of $71 are listed several times on the progressive screens leading to the final order page, it said.
“In total, Gap represents the discount price seven times, the regular price six times, the discount percentage twice and the discount value three times before the purchase is made,” according to the case.
The same progressive screen grabs are included for the “Sherpa zip jacket,” which has a regular price of $64.99 but is selling for 40 per cent off, at $38.99, according to the website.
The final page for that product includes five items under “customers also liked,” and each has the crossed-out regular price, the sale price and that it’s 40 per cent off.The lawsuit alleges the retailers present a “false and misleading” price at which the products are regularly sold and therefore the sale price is “illusory.”
It said the products were offered for sale at the regular price “far less than 50 per cent of the time” and because they’re offered “so infrequently,” the majority of the sales are at the sale price.
The lawsuit alleges the practice “violated the reasonable expectations” of consumers because they relied on the full retail prices as being “accurate valuations” when they were deciding to buy.
The plaintiff sent a letter to the retailers to advise them class members in Ontario, Prince Edward Island and Alberta also seek damages and repayment under the federal consumer law and provincial laws, according to the claim.
It said as a result of the alleged breaches of the various laws, the plaintiff and class members have suffered damage and the retailers have been “unjustly enriched” by the purchases, and the buyers deserve restitution.
The lawsuit alleges breaches of Section 52 of the federal Competition Act and Sections 5 and 6 of B.C.’s consumer law, which prohibit deceptive practices, and Sections 8 and 9 of the B.C. law, which ban unconscionable acts or practices.
Punitive damages are also owed because the retailers “repeatedly, over a period of years” allegedly misrepresented the real value of products in an “overwhelming majority of all sales” and the conduct was “high-handed, outrageous, reckless and predatory,” it said.
“It is essential that companies honestly and accurately represent the regular and discount prices of their products” so consumers can make informed choices, said lawyer Sam Jaworski at Slater Vecchioin in a news release.
“We don’t comment on pending litigation,” Gap Inc. spokesman Jason Allen said in an email.
Slater Vecchio has a form on its website for any consumers who want to join the proposed class.
None of the allegations have been proven in court.