Consumerist readers as well as dedicated outlet and closeout shoppers know that the “compare at” or “manufacturer’s suggested retail price” tags at outlet stores don’t necessarily mean anything. Two occasional TJ Maxx shoppers have now proposed a federal class action lawsuit against the company for false advertising, claiming that the company engages in “deceptive pricing.”

It’s not that the shirt you’re buying isn’t necessarily worth the $20 that you paid. The problem, the two plaintiffs claim, is that the “compare at” prices you see on TJ Maxx price tags are just made up. Your shirt might be worth $20, but you might have purchased it based on the assumption that a similar shirt elsewhere would be worth $39.95, since that was the “compare at” price on the tag.

This is called price anchoring: instead of starting out with the idea that the shirt is worth $20, the deal looks even better since your first impression of the shirt is that it’s “worth” $40. The plaintiffs in this suit find that practice unfair. In their initial complaint, their attorneys explain:

The comparative price assures consumers like Plaintiffs that they are receiving an exceptionally good deal and saving a specific dollar amount equal to the difference between the two prices. Defendants’ price tags deceptively instruct customers to “compare” the sale prices of their products to these higher comparative prices. The comparative prices, however, are false. They are not true, bona fide comparative prices.

How did they learn that TJ Maxx is pretty much pulling these figures out of the air? Well, the retailer’s own website says so.

The “compare at” price is our buying staff’s estimate of the regular, retail price at which a comparable item in finer catalogs, specialty or department stores may have been sold. We buy products from thousands of vendors worldwide, so the item may not be offered by other retailers at the “compare at” price at any particular time or location. We encourage you to do your own comparison shopping as another way to see what great value we offer. We stand for bringing you and your family exceptional value every day – it’s the foundation of our business.

T.J. Maxx Sued Over Misleading Price Tags [Racked]
Chester et al. v. TJX Companies [PDF Download]

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