Nike has been named in a $5 million potential class action lawsuit, charging it with using misleading price tags at its outlet stores in an attempt to confuse consumers as to the original price of the goods. Filed against the American sportswear giant on Monday in the U.S. District Court for the District of Oregon, a federal court in Portland, by Monika Taylor, the lawsuit alleges that Nike “misrepresented the existence, nature and amount of price discounts on products sold in Nike Outlet stores by purporting to offer discounts off of a false ‘Suggested Retail Price,’ which the Plaintiff understood to be short for the commonly used retail phrase: Manufacturer’s Suggested Retail Price (MSRP).”
The complaint alleges that Nike “led consumers to believe that its MSRPs represented authentic price information about the products they purchased. In reality, Nike manufactures the Nike Outlet Products for exclusive sale at its Nike Outlets and always sells these goods for the advertised ‘OUR PRICE,’ never the MSRP.” Such practices, according to the complaint, amount to "a sham designed to mislead and deceive consumers, as the MSRPs did not represent a bona fide price at which the Nike Outlet Products were previously sold. Nor was the advertised MSRP a prevailing market price within three months immediately preceding the publication of the advertised former prices, as required by California law."
Taylor's complaint elaborates, stating:
Nike knows consumers are bargain-hunters, and knows consumers are excited by theprospect of a bargain. The juxtaposition of an artificial MSRP and an “OUR PRICE” on Nike Outlet Product price tags is intentionally designed to convey to consumers that the consumer is receiving a bargain or a “deal” on the product—on sales terms more preferential or more optimal to the consumer than those offered outside the context of the outlet store. But there is no bargain to be had. The MSRP on Nike Outlet Products exists only to create the illusion of a bargain and the words “Suggested” and “Our” are used only to deceive consumers into making purchases they otherwise would not have made because they perceive that Nike is offering a product for sale at a lower price than what the products’ manufacturer suggested it should be sold.
In addition to state law violations, Taylor claims that Nike's pricing scheme is in direct violation of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce” and specifically prohibits false advertisements. As a result, Nike has "improperly obtained money from Plaintiffand the Class."
Taylor has asked the court to "cause Nike to restore this money to Plaintiff and all Class members, and to enjoin Nike from continuing to violate the UCL as discussed herein and/or from violating the UCL in the future," and of course, to certify the proposed class action lawsuit, thereby allowing other similarly situated individuals to join in.
The lawsuit at hand comes in the heels of a number of similar suits filed in late 2015 and early 2016 against brands, including Burberry, Kate Spade, Bloomingdale’s, and Macy’s.