Carter's Class Action Lawsuit: Are Those Baby Clothes Discounts Real?

Case Overview: A class action lawsuit has been filed against Carter's, alleging the retailer uses deceptive pricing tactics to inflate the prices of baby clothes.

Consumers Affected: Individuals who purchased baby clothes from Carter's.

Court: U.S. District Court for the District of Oregon (Portland Division)

Baby clothes retailer Carter has held a years-long campaign to trick shoppers into paying more for its products through “the widespread and perpetual use” of false reference and discount pricing, a new class action lawsuit alleges.

The lawsuit says it aims to hold the multimillion-dollar company to account for cheating customers by continually advertising false price discounts for its infant and young children’s apparel sold throughout its Carter’s stores and on its website, carters.com.

“In sum, Defendant’s fake discount scheme does not comply with the law and is intended to increase sales while depriving consumers of the benefit of their bargain,” the lawsuit alleges. 

Carter's Accused of False Advertising in Class Action Lawsuit

Oregon resident Ann Booth filed the proposed class action lawsuit against the company after buying her baby some snail print and other pajamas, and a three piece cardigan set from the store, relying on its “false and deceptive advertising, marketing and discount pricing scheme.”

She says that while shopping, she read the advertised discounts on the items and decided to buy them thinking she was getting a good deal because they were worth more than what she was paying, but that turned out not to be true. Because of Carter’s fake sale prices, she was tricked, she alleges, adding she wouldn’t have bought the items had she known the truth. 

The lawsuit says that Booth’s lawyers did a large-scale, comprehensive investigation into the scheme and found everything “appears to be always, if not virtually always, advertised at discounts from higher reference prices.” 

Booth says in the lawsuit she wants to stop the “false, misleading, and deceptive pricing scheme” and correct the “false and harmful perception it has created in the minds of consumers” as well as get redress for those who overpaid for items.

How Carter's Allegedly Inflates Prices with Fake Discounts

As the lawsuit explains, false reference pricing happens when a seller fabricates a false “original” price for a product and then offers that product at a substantially lower price under the guise of a discount. The artificial price difference misleads consumers into believing the product has a higher market value, and leads them into purchasing the product. “This practice artificially inflates the market price for these products by raising consumers’ internal reference price and in turn the perceived value consumers ascribe to these products,” the lawsuit states.

The schemes allow retailers to sell products above their true market price and value, leaving consumers to pay the inflated price regardless of what they thought of the discount, while manipulating their value perception in the process, the lawsuit alleges.  

Retailers Face Growing Scrutiny Over Deceptive Pricing Practices

Carter’s isn’t alone in facing accusations of false reference pricing. Recently, a class action lawsuit was filed accusing Loft and Ann Taylor outlet stores of using fabricated "original" prices to create the illusion of substantial discounts, misleading consumers into overpaying for products.

JC Penney was hit with a similar lawsuit in March alleging it falsely created the appearance of bargains by marking items as being on sale when in reality the company hadn’t intended on selling them for the original listed price. 

In the Carter's fake discounts class action lawsuit, Booth wants to represent shoppers in Oregon in accusing Carter’s of  violating the state’s Unlawful Trade Practices Act. She is seeking monetary damages, restitution, and declaratory, and injunctive relief.

Case Details

• Lawsuit: Booth v. Carter’s, Inc., et al.
• Case Number: 3:24-Cv-01341-Si 
• Court: U.S. District Court for the District of Oregon [Portland Division] 

Plaintiffs' Attorneys

• Kim D. Stephens and Joan M. Pradhan (Tousley Brain Stephens PLLC)
• Todd D. Carpenter, Matthew J. Zevin, Scott G. Braden and James B. Drimmer (Lynch Carpenter LLP)

Have you shopped at Carter's and felt misled by their discounts? Share your experience in the comments below!