Yahoo Finance Zara Slapped With Price-Baiting Lawsuit
The fast fashion retailer has been accused of bait-and-switch pricing. (Photo: Getty Images)
The reason American Zara stores keep some items priced in euros may not be to give shoppers the feeling that they’ve escaped to Milan for a fun shopping spree. In fact, it might be to deceive them, a legal filing claims.
Shopper Devin Rose has filed a lawsuit against Zara claiming that it deceived American consumers through bait-and-switch pricing. According to the Fashion Law, the $5 million-plus proposed class action lawsuit claims that Rose (and other Zara shoppers) “has been damaged in that Zara’s deceptive pricing practices caused him to overpay for the garments he purchased.”
These practices allow Zara to charge American customers $5 to $50 more than the lowest tag price in euros on an item, and Zara is unjustly raking in billions of dollars this way, the suit charges.
Rose says, “Behind its façade of attainable elegance, Zara is engaged in a widespread practice of deceiving American consumers through a classic bait and switch.” Zara is known for classic lines and affordable pricing that have attracted the likes of Olivia Palermo, Selena Gomez and Kate Middleton.
How can you avoid falling prey to Zara’s alleged schemes? Here’s what to look for:
When items tagged in euros are rung up at check out, the price is converted to U.S. dollars. But Rose claims that the company adds on another few — or more — bucks, thinking it can dupe customers who don’t know the current exchange rates.
Also, you may notice that when the price tags are in U.S. dollars, they are stickers. This is to cover up the original price in euros, which, if converted, is allegedly less than the price on the sticker.
Rose noticed this when he bought three shirts that were tagged in euros from a California shop. The tags each said 9.95 euros, and he was charged $17.90 each. That is a roughly 60 percent markup; the correct pricing should have been $11.26. Yikes!
The suit claims that “Zara violates State and Federal law by luring consumers to the register with perceived lower prices using a foreign currency and surreptitiously imposing an arbitrary markup without making an appropriate, or any, disclosure to the consumer.”
Zara is claiming that there was no wrongdoing on its part. In a statement to the Fashion Law, a spokesperson for the brand said:
“Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States. 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. We remain focused on providing excellent customer service and high-quality fashion products at great value for our customers. We look forward to presenting our full defense in due course through the legal process.”
If Rose’s proposed class action lawsuit is certified by the court, individuals who were allegedly duped by Zara in the U.S. around the time Rose made his purchases can join the case and share in the settlement amount. So, keep your receipts.
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