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Saks Sued for Misleading Markdowns

Saks Fifth Avenue has been charged with tricking shoppers into thinking they were getting a bargain.

A proposed class-action lawsuit against the department store chain, filed Thursday in California Southern District Court by Randy Nunez, accused the retailer of promoting “phantom markdowns” of products at its stores and online, Law 360 reported.

According to the plaintiff, he purchased Saks-branded shoes that were advertised at 44 percent off a market value of $145—a price the lawsuit alleged they were never sold at to begin with. Furthermore, the complaint stated that the retailer repeatedly violated California’s Unfair Competition Law, False Advertising Law and Consumers Legal Remedies Act by touting original prices that did not match prevailing market prices within three months of the ads.

“The advertised discounts were nothing more than mere phantom markdowns because the represented market prices were artificially inflated and were never the original prices for clothing, shoes and fashion apparel sold at defendant’s retail stores and/or on its Internet website,” the complaint stated. “Plaintiff would not have purchased the shoes without the misrepresentations made by Saks.”

Similarly, T.J. Maxx was sued last summer for allegedly using fake comparison pricing to encourage consumers to spend.

According to a statement on the discounter’s website, the “compare at” price listed on tags is the staff’s estimate of “the regular retail price at which a comparable item in finer catalogs, specialty or department stores may have been sold” and that “the item may not be offered by other retailers at [those] prices at any particular time or location.”