Class Action Challenges Retailer’s Sale Email, Pricing Model

Advertising Law

A Washington resident has filed suit against children’s clothing retailer Carter’s over an email touting a sale price that she alleges was false and deceptive.

On February 16, 2019, Maribell Aguilar received an email from Carter’s Inc. with the subject line “50-70% OFF EVERYTHING.” Believing the message to mean that she would receive a discount of 50 to 70 percent off the retailer’s regular or prevailing prices for all of its products, she visited a Carter’s store in Union Gap and purchased several items.

When Aguilar did not receive the discounts she understood were promised in the email, she filed suit, alleging violations of the state’s Consumer Protection Act and Commercial Electronic Mail Act.

The discounts were actually reductions from Carter’s manufacturer’s suggested retail price (MSRP), she told the court, but there was nothing in the email subject line (such as an asterisk) that communicated that the 50 to 70 percent off referred to something other than Carter’s regular or prevailing price. In fact, Carter’s is the manufacturer of the clothes it sells, Aguilar added, and the MSRP is not set by the market or a third party.

Instead, “Carter’s intentionally sets the MSRP at an inflated dollar amount which Carter’s knows with certainty is grossly above the true market price for the product,” according to the complaint. “Meanwhile, Carter’s policy, as the manufacturer, is to give each product a price tag with this self-created, inflated MSRP which is the same regardless of whether the product is offered direct by Carter’s in its stores or on its website, or offered by its resellers.”

Carter’s also has a policy of “rarely if ever” offering its products in its retail stores or on its website at the purported MSRP, Aguilar alleged. Resellers of Carter’s products—retailers such as Kohl’s—similarly do not rely on the MSRP for pricing.

“In sum, neither Ms. Aguilar nor an ordinary Washington consumer did or would understand the words ‘50-70% OFF’ in the email’s subject line to refer to a discount from a self-created MSRP which Carter’s created in bad faith and which neither Carter’s nor its resellers treat as a real, bona fide price,” the plaintiff alleged.

Aguilar’s complaint, which was filed in the U.S. District Court for the Eastern District of Washington, requests injunctive relief as well as monetary damages.

To read the complaint in Aguilar v. Carter’s, Inc., click here.

Why it matters: Lawsuits questioning the use of MSRPs as the basis for sale or outlet pricing have been a frequent target for consumer class actions in recent years. In her new Washington federal court complaint, the plaintiff tacked on a claim based on the email she received from Carter’s, which she alleged violated state law by containing false or misleading information in its subject line.