Class Action Accuses TJ Maxx of Selling Products at ‘Phantom’ Markdowns

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Four named plaintiffs are behind a proposed class action lawsuit in which they claim defendant TJX Companies, Inc. sells merchandise at false sale prices in its Florida TJ Maxx stores.

According to the lawsuit, TJX offers items for sale by comparing two separate prices: a “compare at” price and a product’s actual sale price. The “compare at” price, the lawsuit says, is always a higher amount of money, while a product’s true sale price is a substantially lower amount at which TJX sells the product. The lawsuit calls this a “phantom markdown,” whereby the defendant presents a comparative price that’s only an “unverified estimate” of what it believes comparable products might sell for at other retailers.

The complaint goes on to claim that while TJX purports that its “compare at” price markups range anywhere from 23 to 54 percent above a product’s bona fide sale price, the company fails to disclose any information that defines the term “compare at,” nor does TJX offer “any context for the ‘compare at’ pricing provided.” The plaintiffs claim that without any context or justification for its “compare at” prices, TJX leads reasonable consumers to believe they’re saving money.

“Such conduct tricks consumers into thinking they are getting a ‘bargain,’ based on the use of fictitious comparison prices which do not reflect any real price at which the items in question have ever actually been sold by either [the defendant] or its competitors in the marketplace,” the complaint reads.