Costco Fails to Disclose When Products Sold Online Are More Expensive Than Same Items Sold In-Store, Class Action Claims

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A proposed class action lawsuit alleges Costco has posted deceptive marked-up prices on its website, routinely failing to disclose that consumers will pay more for a product sold on Costco.com than if they bought the same item in-store.

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The 11-page Costco lawsuit says that although the big-box retailer promises that it will disclose whenever a product is more expensive online than in a consumer’s local warehouse store, the company many times leaves out this disclosure on its online product pages. Per the suit, Costco deceives shoppers into making online purchases “that they otherwise would not make,” causing monetary damages.

“By failing to disclose the truth to consumers about its online markup practices and the substantial price differential between identical items sold online and in-store, Costco deceives consumers and gains an unfair upper hand on competitors that fairly disclose their true pricing practices,” the complaint summarizes.

In a section on its website titled “Are warehouse and online prices the same?,” Costco states expressly that “products sold online may have different pricing than the same products sold at your local Costco warehouse,” the filing shares. The retailer’s statement indicates that it will necessarily include a price disparity disclosure “in all instances when an item is available for sale both online and in stores,” the suit says.

However, Costco regularly fails to disclose this “material notification” online and on its mobile app, the case alleges.

The plaintiff, a Norwalk, Connecticut consumer, bought various items in January of this year for a total amount of $145.52, the suit states. Per the lawsuit, none of the products the plaintiff purchased included the disclosure that any of them might be available for a lower price at her local Costco store.

“Upon information and belief, several of the products Plaintiff purchased on Costco.com for delivery were actually more expensive than if she had purchased the exact same items in-store,” the case claims.

For instance, a 30-roll pack of Charmin toilet paper cost the plaintiff $33.49 online yet would have cost only $29.99 in-store, according to the complaint.

The consumer contends she would not have made the online purchase had she known she could have bought the exact same toilet paper for $4 less at her local Costco store.

The Costco class action lawsuit looks to cover all consumers who, within the applicable statute of limitations period, made a purchase for delivery through the Costco app or website and paid more for a product than was charged by Costco for the same product in-store when the online product page had no disclosure warning that the item may be available in-store for a lower price.

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