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Thursday, May 30, 2024 | Back issues
Courthouse News Service Courthouse News Service

Class Claims Amazon|Misrepresents Discounts

SAN DIEGO (CN) - A class action accuses Amazon of defrauding consumers by misrepresenting the "list price" of stuff it sells online.

Amazon is the largest online retailer in the United States, with $44.5 billion in annual revenue, according to the complaint, lead plaintiff Andrea Fagerstrom says in her Nov. 25 Superior Court complaint.

Amazon customarily displays it products with a list price, followed by Amazon's discounted price, and then the purported savings in both a dollar amount and percentage, Fagerstrom says.

But Amazon's "list price" is the highest manufacturer's suggested retail price (MSRP) or the highest price at which the product has ever been listed, according to the lawsuit.

This belies Amazon's claim, because the "list" price is not the prevailing market price used by competitors and traditional brick-and-mortar retailers, Fagerstrom's attorney Trenton Kashima told Courthouse News.

California's False Advertising Law, quoted in the lawsuit, requires retailers to determine list price based on data for the prevailing market price over the past three months, or state the date on which the list price was established.

Amazon fails to do either, but "cherry-picks" the highest price it can find for a given product, Kashima said.

This marketing strategy "creates a false sense of urgency," making costumers think they "should act quickly or lose a significant savings," Kashima said.

Fagerstrom claims that she paid Amazon $299 for a blender that Amazon claimed had a list price of $329. But the alleged 9 percent savings was "illusory" because the genuine market price for the blender was $299, including at Target.

Plaintiffs seek class certification, restitution, an injunction, and damages for business fraud, unfair trade practices, misrepresentation, and deceptive advertising.

Attorney Kashima is with Finkelstein & Krinsk, of San Diego.

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