Class Action Lawsuit Alleges Barneys Warehouse Advertises Fictitious Discounts on Outlet Store Merchandise

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From California’s Southern District comes a proposed class action lawsuit that alleges Barneys New York advertises fictitious sales prices and “phantom discounts” on items sold at its Barneys Warehouse outlet stores.

The 19-page lawsuit explains that Barneys allegedly employs the fraudulent practice of labeling items at false reference prices. According to the case, this practice relies on the use of a fabricated regular or original reference price at which a product was ostensibly sold prior to being made available on sale. A retailer engaged in this practice, the suit continues, will then offer the item for sale at a purportedly steeply “discounted” price, creating what the case calls a sham price disparity that “misleads consumers into believing they are receiving a good deal and induces them into making a purchase.” 

As the lawsuit tells it, the merchandise sold at Barneys outlet stores “is never offered for sale, nor actually sold, at the represented reference price.” The reference price, according to the case, is used merely as a benchmark from which the false discount and so-called sale price are derived.

“Barneys’ scheme has the effect of tricking consumers into believing they are getting a significant deal by purchasing merchandise at a steep discount, when in reality, consumers are paying for merchandise at its regular retail price,” the lawsuit reads.