(CN) — Two California woman have filed a class action against cookie company Crumbl, accusing it of hiding a “sinister truth” — that a concealed 2.95% service fee is added to every customer’s purchase.
Lisa Watson and Angela Keers filed the suit on Monday in federal court in California against Crumbl LLC; Crumbl IP, LLC; and Crumbl Franchising, LLC.
Crumbl, called in the suit the fastest growing gourmet cookie business in the country, offers online ordering through its app, website or on iPads in stores. Starting in 2017 with a Logan, Utah, store, Crumbl currently has over 800 bakeries throughout the country. Their cookies cost over $4 each.
“However, Crumbl’s promotion of a smooth, ‘tech-driven’ customer experience hides a more sinister truth: every time a customer utilizes the Crumbl App, Crumbl charges a carefully concealed 2.95% ‘Service Fee,’” the plaintiffs say in the complaint. “As a result of this automatic fee, customers pay a uniformly higher price for Crumbl’s products than advertised on the menu.”
The plaintiffs break down the cost of a Crumbl cookie in the complaint. There are subtotal, taxes and fees, and tip categories when ordering through the app or online. A small, light gray question mark icon appears next to “taxes and fees” that the user must click to see a price breakdown. The 2.95% fee is then shown.
“Given that the vast majority of American consumers already expect to pay sales tax on their purchase, Crumbl purposefully hides this charge among state taxes where it is unlikely to be discovered by reasonable consumers,” the complaint states.
The fee also is charged when people buy from a cashier in a store and those customers can’t discover the fee until they have made their purchase. At no point is this service fee disclosed, according to the plaintiffs.
Crumbl’s failure to list the price of its products with the service fee is a violation of a California law that requires the total price, including surcharges, to be included in advertisements, the plaintiffs added.
They argue that Crumbl added the fee to help cover rising operations costs, instead of increasing its menu prices, and that deceives people into thinking their purchase will cost less when they order.
“In the face of increased competition and copycat products, Crumbl knows that raising its prices could result in the loss of sales,” the complaint states. “Thus, Crumbl has incentive to hide additional costs to give the illusion to consumers that its prices have remained constant — all the while increasing its profits by nearly 3%.”
Watson and Keers argue that Crumbl has “unfairly, deceptively, and/or misleadingly” charged customers this fee, and this pricing method was applied to all customers with no explanation or disclosure.
“Crumbl engaged in its unfair and deceptive pricing scheme in order to induce plaintiffs, class members, and all reasonable consumers to purchase its products by representing a lower retail price, thus uniformly increasing its profits by 2.95%,” they say in the complaint.
The plaintiffs, who are seeking class certification and a jury trial, are asking for compensatory, exemplary and statutory damages for themselves and what they estimate to be thousands of people across California and the U.S.
Watson, of Modesto, and Keers, of Redding, also asked the court to stop Crumbl from its “wrongful and unlawful conduct;” for attorneys’ fees, and for pre-judgment and post-judgment interest at the highest rate allowed.
A Crumbl representative could not immediately be reached for comment Tuesday.
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