Class Action Lawsuit Calls Target, Shipt Delivery Fee for Calif. Consumers a ‘Textbook Bait-and-Switch’

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A proposed class action lawsuit alleges Target and Shipt have deceived California consumers by promising to provide “free” or flat-rate delivery only to tack on an additional fee at the end of the checkout process.

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The 19-page lawsuit against Target and Shipt, a same-day delivery service owned by the mega-retailer, says that although the companies prominently advertise that a Shipt membership will provide free delivery for orders over $35, and that orders less than $35 are subject to only a flat delivery fee, California consumers are nevertheless charged a $3.99 “CA Shoppers Benefits Fee” on every order delivered in the state.
 
As the class action suit tells it, Target and Shipt’s “CA Shoppers Benefits Fee” is added only to delivery orders and is, by definition, a delivery fee. The charge is allegedly not disclosed to consumers until the very last step of the online purchase process.
 
“Reasonable consumers like Plaintiff process through check-out without ever becoming aware of any additional fees assessed by Defendants until right before purchase,” the complaint states. “This is a textbook bait-and-switch.”
 
Central to the Target lawsuit is Proposition 22, a California ballot initiative in the November 2020 election that aimed to exempt app-based transportation and delivery companies from AB5, a newly minted law that would have required Shipt and others to classify their drivers as employees rather than independent contractors. Had AB5 remained the law, the filing says, all Shipt drivers would have been guaranteed a variety of employee benefits, including overtime, sick time, healthcare, and bargaining rights, among others.
 
Per the case, when AB5 passed in September 2019, app-based food delivery companies such as Shipt “publicly protested and decried the law” as out of sync with their business model, and in response “devised” Prop 22, which the suit notes contained certain minimum protections and benefits to drivers, ostensibly in a concession to labor advocates and to gain public buy-in.
 
According to the lawsuit, Shipt and other companies spent over $200 million campaigning for Prop 22, which was touted as a “compromise” that would create essentially a third employment classification for drivers.
However, after California voters passed Prop 22, Shipt found itself required to pay for certain driver benefits and protections that it had not previously been on the hook for, the lawsuit shares.
 
The class action contends that the challenged “CA Shopper Benefits Fee” added to all California delivery orders is the result of Shipt being unwilling to “pay the costs associated with [Prop 22’s] passage.”
 
The Target and Shipt class action lawsuit looks to cover all consumers in California who, within the applicable statute of limitations period, paid a “CA Shopper Benefits Fee” to Shipt and/or Target.
 
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