This story was first published by Digiday sibling ModernRetail
The retail industry is facing a significant surge in legal scrutiny as “phantom discount” practices come under fire.
In recent weeks, major global brands — including Lululemon and Nike — have been the subject of lawsuits alleging deceptive pricing strategies, where products are marketed with dubious “regular” prices that make sale prices appear more attractive to consumers. Legal and marketing experts note that these types of advertising practices have existed for decades. However, the recent increase in consumer filings suggests a growing trend that could continue to reshape advertising practices in the e-commerce industry.
Last week, Lululemon was sued by a California woman in Los Angeles Superior Court, claiming the company listed products with “fictitious regular prices” and “corresponding phantom discounts.” According to plaintiff Annette Cody, Lululemon has been displaying false original prices, only to strike them through and make the new “sale” prices look more enticing.
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