Zara USA hit with "bait-and-switch" pricing lawsuit

By

Obi Anyanwu

Published
Aug 24, 2016

Zara this week has been hit with a lawsuit alleging that it posts deceptive prices for its products. Shopper Devin Rose filed a $5 million lawsuit against the retailer on August 19 claiming fraud, bait-and-switch pricing and cover up pricing.

According to Rose, he noticed Zara’s pricing was off at the Sherman Oaks, CA store when he was charged $17.90 for a €9.95 shirt. Rose brought this to the cashier’s attention and the cashier explained that the $17.90 is the exchange price from Euros to US dollars. Rose then checked the exchange to find that he should be charged $11.26 instead of $17.90, which is a markup of about 60%.
 
The complaint, according to The Fashion Law, states, “Zara marks the price tags on many of its products with only a euro price. Since the euro is a larger unit of currency than the American dollar, these euro prices lead shoppers in the United States to believe that Zara’s products are less expensive than they actually are. Thus, Zara customers are lured in by the brand’s seemingly low prices, and it is only upon bringing the items they intend to purchase to the register that these customers discover their true costs. To make matters worse, however, the prices that consumers are ultimately quoted — prices that are only revealed when the items have been already been scanned and the consumer is asked for payment — are not accurate American dollar equivalents to the euro prices on the tags, but rather arbitrarily inflated amounts that are substantially higher.”

One of Rose’s attorneys, Ben Meiselas of Geragos  & Geragos, told The Fashion Law that they hope Zara will “stop its unlawful pricing practices” that has resulted in customers spending $5 to $50 more per item.
 
On Monday, August 22, Zara USA denied the allegations in a statement and said, “While we have not yet been served the complaint containing these baseless claims, we pride ourselves in our fundamental commitment to transparency and honest, ethical conduct with our valued customers.”
 
This lawsuit follows two class actions suits against Zara for displaying the first six digits of credit cards on receipts. Erojona Vasquez filed the first lawsuit in Illinois for the period between December 17, 2014 and April 27, 2015 and Yan Tsang and Florence Mussat filed the same suit in Illinois for the period between April 28, 2015 and July 1, 2015. Zara settled the suit from Tsang and Mussat in August.