Macy's Class Action Lawsuit: Retailer Accused of Deceptive Pricing

Case Overview: A class action lawsuit claims Macy's misled consumers with deceptive pricing tactics, using inflated reference prices to create the illusion of significant discounts.

Consumers Affected: Consumers who purchased products from Macy's.

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

Retail giant Macy’s is using deceptive pricing tactics to trick shoppers into thinking they’re getting significant discounts, when in fact they’re paying artificially inflated prices, a new lawsuit alleges. 

The lawsuit alleges that Macy’s inflates “reference prices” on its products, creating the illusion of deals with discounts of up to 70 percent. However, these reference prices are allegedly fictitious, as Macy’s rarely, if ever, sells the products at those higher prices, the lawsuit claims. 

In doing so, the company violates California and federal laws by misleading consumers into overpaying for items they believe are discounted, the lawsuit alleges.

Consumer Claims Macy's Uses Deceptive Pricing Tactics

California resident Golnaz Paya filed the proposed class action lawsuit against Macy’s, alleging that she was duped by the company’s online sales. In June, she purchased a ring advertised with a “regular” price of $60 and a sale price significantly lower. 

Believing she was snagging a great deal, she completed the purchase, only to later discover that Macy’s rarely sold the item at the inflated reference price.

Paya says she wouldn’t have paid as much if she’d known the truth. Macy’s pricing tactics, the lawsuit argues, misrepresented the product’s value and influenced her decision to buy. She claims that because of the experience, she remains hesitant to shop at Macy’s in the future, unsure if advertised discounts are genuine.

Lawsuit Alleges Macy's Inflates Reference Prices to Mislead Shoppers

According to the lawsuit, Macy’s perpetuates a scheme by setting inflated reference prices as a baseline for discounts. These prices are displayed alongside lower “sale” prices, creating the impression of significant savings.

Researchers have found that such practices exploit consumer psychology. Shoppers are more likely to purchase items when they believe a discount is temporary or substantial, and reference pricing fuels this urgency. Macy’s allegedly uses this tactic to drive sales, despite the discounts often being illusory, Paya alleges.

Laws Protect Consumers From Fake Discounts

As the lawsuit explains, federal and state laws explicitly prohibit deceptive pricing practices. The Federal Trade Commission guidelines warn against using false reference prices to mislead consumers, and California law also bars businesses from advertising goods with inflated former prices.

The Ninth Circuit Court has ruled that false discounting harms consumers by inducing them to make purchases they wouldn’t have otherwise considered, the lawsuit states, alleging that Macy’s has violated these protections, undermining trust in its advertised sales.

Other Retailers Face Similar Lawsuits Over Deceptive Pricing

Macy’s is not alone in facing accusations of deceptive pricing. Several major retailers have been sued recently:

• Bulova: In November 2024, the watchmaker was hit with a lawsuit alleging inflated reference prices on its website.
  
  
• Home Depot: A class-action lawsuit in October 2024 accused the retailer of exaggerating original prices to make discounts appear larger.
  
  
• Amazon: A September 2024 lawsuit claimed Amazon used false discounts on Fire TVs by listing inflated “list prices” with strikethroughs.
  
  
• Temu: In August 2024, the e-commerce platform faced allegations of fake markdowns with fabricated original prices.

Paya’s lawsuit seeks to represent consumers from across the country who have been duped by Macy’s reference pricing scheme, arguing violations of state and federal law. She wants to recover damages and get injunctive relief, and wants Macy’s to disgorge revenue that it got through alleged false reference prices and false discounts. 

Case Details:

• Lawsuit: Paya v. Macy’s Inc.
• Case Number: 2:24-cv-10065-JLS-PD
• Court: U.S. District Court for the Central District of California

Plaintiffs' Attorneys:

• Kyle McLean, Lisa R. Considine, David J. DiSabato, and Leslie L. Pescia (Siri and Glimstad, LLP)

Have you shopped at Macy's recently? What are your thoughts on their pricing practices? Share your opinion in the comments below.