Time To Settle: Fossil Reaches $4.5M Deal Over Outlet Pricing

Advertising Law

Time has run out on a deceptive pricing lawsuit against Fossil, with the parties reaching a $4.5 million settlement agreement.

Timur Safransky accused the timepiece company of using deceptive comparative price tags on watches at its outlet stores to trick consumers into thinking they were getting a great deal. The reference price was false and deceptive in violation of California’s Unfair Competition Law, False Advertising Law and Consumer Legal Remedies Act, the plaintiff alleged, because the outlet items were never sold at other locations or at any other prices.

After the California federal court denied Fossil’s motion to dismiss the suit, the parties agreed to mediate, which led to a settlement.

Fossil, while admitting no wrongdoing, will provide $4.488 million in merchandise credit for the roughly 408,000 class members—those who purchased outlet-exclusive products at any Fossil outlet store in California between September 13, 2013, and May 3, 2019—in an amount estimated to be $11 each. The company’s total commitment will not exceed more than 800,000 merchandise certificates.

The certificates, valid for six months from the date of issuance, are stackable and may be used with any other discounts or promotions as well as for items already on sale.

Fossil’s settlement fund will also cover an award not to exceed $2,500 for Safransky and a payment of no more than $219,000 to class counsel to cover attorney’s fees and costs.

In addition, the company represented, independent of the pendency of the lawsuit and settlement, that it modified its pricing practices in Fossil outlet stores in the state.

To view the settlement agreement in Safransky v. Fossil Group, Inc., click here.

Why it matters: Deceptive pricing suits—including a wave of litigation that ranges from window signs promising sales that lured consumers who were charged full price to “buy one, get one” promotions to the price tags at outlet stores—continue to be a costly proposition for companies. Advertisers should take care with their pricing, or they might end up paying out.