The popular Spanish clothing retailer Zara uses tags that show prices in euros, even here in the United States. In August 2016, a class action lawsuit was filed in Los Angeles alleging that the company is deceiving and confusing customers with the tags because the euro price is a number significantly lower than the actual dollar price of the item. Customers are lured by the euro price to the cash register where they find out what the item really costs.
In addition to confusing customers by showing only the lower euro price, the suit claims that the euro to dollar conversion is never equal to the current currency rate, but is instead always significantly more than what the converted amount should be. The suit gives the example of three shirts that LA resident Devin Rose bought for the price of € 9.98, which at the time of purchase was equal to $11.26. However, when Rose went to pay for the shirts he was told they cost $17.90 each, or more than one and a half times the properly converted amount. An examination of Zara price tags revealed that when converted to dollars, all the merchandise is being sold at significant mark ups, a practice known as “bait-and-switch.”
Another practice alleged in the lawsuit is “cover-up” pricing. The complaint alleges that a dollar amount shown on the Zara price tag is ordinarily placed on a sticker covering up the euro price. This dollar amount is purportedly much higher than the “real” euro-dollar conversion. When Rose and other customers inquired about the dollar vs. euro price they were told that it was based on a conversion rate at the time the clothing was manufactured – a false claim according to the suit. The attorneys representing Rose say that Zara’s mark ups from the tagged prices cost consumers “on average $5 – $50 per item and billions of dollars in the aggregate.” In a statement issued after the suit was filed, Zara denied all claims of deceptive pricing.
The Philadelphia consumer protection lawyers at Axler Goldich are leaders in class action litigation. It is our mission to defend the rights of those injured by corporate misconduct and fraud. If you believe you are a victim of consumer fraud the Philadelphia class action lawyers at Axler Goldich will obtain the best results possible for you. A consultation about your case is free – call 866-207-2920 or contact us online. We are located in Center City, Philadelphia and serve clients nationwide.