Kohl’s Hit with Class Action Over Alleged Use of False Reference Prices

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A proposed class action alleges Kohl’s Corporation and subsidiary Kohl’s, Inc. have misled consumers by advertising products with false “regular” or “original” prices and corresponding fake discounts, giving an impression of a bargain.

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The 29-page lawsuit says that Kohl’s intentionally advertises false reference prices to lead shoppers to believe they are getting a discount on a product with a higher market value than it actually has. However, in reality, the purported “sales” are fictitious, as the retailer sells “at most, only a tiny fraction” of its items at their “regular” prices, and many products are never offered at the advertised original price at all, the suit claims.

“In short, the so-called ‘Regular’ and ‘Original’ prices are nothing other than artificially-inflated markups over the prices at which Kohl’s actually expects to sell its products,” the case contends.

In addition to the allegedly illusory discounts advertised in-store, on Kohls.com, in email and print promotions and through buy-one-get-one (BOGO) deals, the retailer “perpetuates the deception” at checkout by listing on a consumer’s receipt a purchased item’s higher “original” price, its discounted price and the total purported savings, the complaint relays.

Under state law, a higher comparison price must be based on a retailer’s normal selling price in the regular course of business, the filing says. Specifically, price comparisons must be based on the price at which a seller actually sold the product in the 90 days before the promotion began, the lawsuit shares.

According to the suit, an investigation by the Wisconsin plaintiff’s legal counsel revealed that between May 2022 and August 2023, more than 9,000 products listed on Kohls.com were on sale “at least 46 days out of every 90-day window (i.e., more than 50% of the time), and some products were perpetually on sale for as many as 90 days out of every 90-day window.”

For example, in May 2023, the plaintiff purchased a JBL portable speaker on Kohls.com that was newly listed and advertised with a “regular” price of $129.99 and a “sale” price of $99.99, the case says. However, though the defendant only began selling the speaker that month, the product was “immediately” listed at the discounted price “before ever being offered at the higher comparison ticket price,” the complaint contests.

Further, in a period of 108 days after the speaker was listed on the website, it was offered on sale “at least (and probably more than) 80 days,” or 74 percent of the time, the filing claims.

“In short, the data shows that Kohl’s turns the concept of a ‘sale’ on its head: for the vast majority of products, the so-called ‘sale’ price is the regular and normal price, while the higher advertised ‘Regular’ or ‘Original’ comparison price is the temporary and unusual exception,” the lawsuit argues.

By promoting false discounts alongside artificially inflated original prices, the retailer fools consumers into buying products they otherwise would not have purchased, the suit alleges.

“Since the higher advertised comparison prices materially overstate the actual market value and worth of Kohl’s private and exclusive branded products, consumers like [the plaintiff] and the Class who buy these products do not receive the benefit of the bargain Kohl’s promises them, and they suffer damages because they do not receive items that have the value or worth that Kohl’s represents they have,” the case charges.

The lawsuit looks to represent anyone in the United States who, between November 3, 2020 and May 21, 2023, purchased from Kohls.com one or more items advertised with a “sale,” “clearance” or percentage-off price compared to a higher “original” or “regular” price and who has not received a refund or credit for their purchase(s).

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