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Newegg Faces Class Action Over Pricing

LOS ANGELES (CN) - Online retailer Newegg inflates the value of its discounts by listing products at their peak value and displaying prices that are a "work of fiction," according to a class action lawsuit.

M. George Hansen of San Diego sued Americas in Superior Court on Dec. 12, alleging consumer law violations and unfair and fraudulent business practices.

Newegg is best known for selling laptops, computer parts and other electronics.

Hansen claims Newegg's website includes deceptive price lists.

"(T)hese advertised 'discounts' are completely illusory or grossly overstated," the lawsuit states.

Hansen claims Newegg "cherry-picks" prices, and that its prices are no better than its competitors'.

He claims that consumers may end up receiving no discount at all, or paying a higher price than if they shopped at a traditional retail store.

The "'list' price is the highest price the product has ever been listed for, regardless of when that price was advertised, or is a simply a work of fiction. Simply stated, defendant cherry-picks the highest price it can find or the item and uses it to create a significant price discrepancy and the impression of considerable savings for its customers," the complaint states.

Hansen seeks restitution, refunds, costs and an injunction.

He is represented by Trenton R. Kashima with Finkelstein & Krinsk of San Diego.

Newegg did not immediately respond to a request for comment.

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