Planning To Advertise A Fictitious Former Price?

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One shopper at Aeropostale said she bought a sweatshirt for $23.98 that was advertised as being 60% off of an original price of $59.95.
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One shopper at Aeropostale said she bought a sweatshirt for $23.98 that was advertised as being 60% off of an original price of $59.95. Another shopper said she bought a pair of pants for $18.25 that were advertised as being 50% off of an original price of $36.50. The clothes weren't defective, and as far as I know, the shoppers were happy with what they bought. 

Here's the issue. The consumers alleged that the items that they purchased “on sale” weren't really on sale and were never offered by Aeropostale at their so-called “original” prices. In other words, the consumers were upset about the fact that they thought they were getting a bargain price on these clothes, but that wasn't really the case. 

The consumers sued, claiming that the store engaged in an “unconscionable commercial practice” under New Jersey law. Like in many other states, New Jersey specifically prohibits the use of a “fictitious former price.” On a motion to dismiss, the Supreme Court of New Jersey held that the plaintiffs had properly alleged a violation of New Jersey law, since they had alleged that Aeropostale never offered the advertised items at the reference price, which made the advertised references prices “fictitious.”

Notwithstanding this, New Jersey's highest court dismissed the plaintiffs' lawsuit. Here's why. 

In order state a private claim – as opposed to a claim brought by the Attorney General – under New Jersey's Consumer Fraud Act, plaintiffs much show that they suffered an “ascertainable loss of moneys or property.” That means that must be able to demonstrate that they suffered a loss that is “quantifiable or measurable.” In order to do that, they must demonstrate either that they have suffered out-of-pocket damages (which would be the difference between the price paid and the actual value received) or that they failed to get the benefit of the advertised bargain (which would be the difference between the price paid and the value of the property had the representations been true). 

Here, New Jersey's Supreme Court found that the plaintiffs had failed to show that they had a “quantifiable or measurable” loss because “they purchased non-defective, conforming goods with no objective, measurable disparity between the product they reasonably thought they were buying and what they ultimately received.” In other words, the consumers got the clothes that they thought they were buying.

While this decision is certainly good news for retailers in New Jersey, it's important to understand that this case is only about the limits of what kinds of false advertising cases consumers can bring. If they're going to bring this type of action, they'll have to be able to demonstrate an ascertainable loss. Importantly, though, advertisers are still prohibited from using fictitious former prices in New Jersey and the Attorney General can still sue if advertisers do so. 

Robley v. SPARC Group, 256 N.J. 541 (2024).

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"they purchased non-defective, conforming goods with no objective, measurable disparity between the product they reasonably thought they were buying and what they ultimately received"

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