Fossil Group Accused of ‘False Reference Pricing’ in Outlet Stores

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Fossil Group, Inc. and Fossil Stores I, Inc. are on the receiving end of a proposed class action lawsuit alleging they falsely advertise products sold in Fossil outlet stores with fraudulently inflated “reference pricing.” According to the complaint, Fossil leads customers to believe that the accessories sold in its outlet stores are discounted items previously sold in retail stores. In reality, the suit claims, outlet store items were never sold at the “Reference Prices” noted on their labels, which are then steeply-discounted on in-store signage. The lawsuit argues that Fossil preys on consumers’ tendencies to purchase on-sale items over full-priced items by using discount signs to provide customers with “a false sense of value.” From the complaint:

“Retailers, well aware of consumers’ susceptibility to a bargain, therefore have an incentive to lie to their customers by falsely claiming that their products have previously sold at a far higher ‘original’ price in order to induce customers to purchase merchandise at a purportedly marked-down ‘sale’ price.”