Banana Republic Class Action Alleges False Discounts at Outlet Stores

Case Overview: A class action lawsuit has been filed against Banana Republic, alleging the retailer used deceptive pricing tactics to inflate the prices of clothing and accessories.

Consumers Affected: Individuals who purchased clothing and accessories from Banana Republic.

Court: U.S. District Court for the Northern District of California

Banana Republic has been hit with a class action lawsuit alleging the fashion retailer dupes customers with fake discounts at its outlet stores.

Two California consumers, Natasha French and Chang Cho, filed the lawsuit against Banana Republic on July 17 in a San Francisco County Superior Court, alleging violations of state and federal consumer laws. The lawsuit was moved to a California federal court on Aug. 15. 

According to the lawsuit, Banana Republic Factory stores have been deceiving consumers for years by advertising false reference prices and discount schemes on various products, including apparel, accessories and shoes.

Banana Republic Accused Of Misleading Consumers With Fake Discounts

The plaintiffs allege that Banana Republic engaged in a widespread and continuous practice of marking up prices on merchandise and then offering "discounts" from inflated original prices that no consumer ever actually paid. 

This misleading strategy of “false reference pricing” tricks consumers into believing they are getting a significant deal when in fact, the merchandise is being sold at inflated prices, the lawsuit states.

“The resulting artificial price disparity misleads consumers into believing the product they are buying has a higher market value, and it induces them into purchasing the product,” it says.

Plaintiff Claims She Was Tricked Into Overpaying For Merchandise

French says she purchased a tan trench coat from a Banana Republic Factory store in California in August 2022. The coat was listed with a reference price of $180 but advertised at a 50% discount with additional markdowns, she says. 

French ultimately paid $83.24 after tax, believing she had scored a significant bargain. However, the lawsuit says that the "original" price was fictitious, meaning French did not actually receive the benefit of the discount she had been led to expect.

As a result, the plaintiffs are looking to represent anyone in California who bought products at a discount from an advertised reference price at a Banana Republic Factory store in California, or from bananarepublic.com or gapfactory.com, and who have not received a refund or credit for their purchase.

They are suing for violations of multiple California state laws, including the Unfair Competition Law and the False Advertising Law, as well as federal consumer protection laws enforced by the Federal Trade Commission. 

The plaintiffs are seeking certification of the class action, damages, fees, costs and a jury trial. They are also seeking an injunction to stop the retailer from engaging in further deceptive advertising.

Class Action Lawsuits Target Deceptive Pricing Practices In Retail Industry

Banana Republic isn't alone in facing heat over pricing tactics. Earlier this year, Torrid faced a class action lawsuit alleging it displays clothing with a "sale" price alongside a much higher "original" price that customers say are entirely fabricated. JC Penney was slapped with a similar class action lawsuit, accused of misleading customers with deceptive sales. 

In March, the spotlight shifted to online mattress seller Purple, with a lawsuit alleging they tricked customers into thinking they were getting a steal, when in reality they were paying full price.

Foot Locker also felt the sting of a class action in July 2023. The New York lawsuit accused them of creating false urgency by warning customers that items were about to sell out. This tactic allegedly pressured customers into impulse purchases.

Case Details

• Lawsuit: French v. Banana Republic LLC et al.
• Case Number: 4:24-cv-05216-DMR
• Court: U.S. District Court for the Northern District of California

Plaintiffs' Attorneys

• Todd D. Carpenter, James B. Drimmer, Scott G. Braden (Lynch Carpenter LLP)

Have you ever felt deceived by discount pricing at Banana Republic or other retailers? Share your experiences in the comments below!