Lawsuit: Zara Misleads Customers By Listing Prices In Euros, Making Its Own Exchange Rate

Image courtesy of Dmitry Valberg

While it’s not entirely unheard of to see prices listed in euros stateside, a new federal class action lawsuit claims that retailer Zara’s practice of doing so — and allegedly making up its own exchange rate — has tricked shoppers into paying more than they should.

The lead plaintiff says he purchased a few shirts at a Zara store in Sherman Oaks, CA three months ago, each with a price of €9.95, Courthouse News reports. But when the cashier rung up his total, he found that he was going to be charged $17.90 for each. This was confusing, he said, as he was only expecting to pay slightly more in U.S. dollars. The cashier said the price was due to the exchange rate, the plaintiff says, a story the worker repeated to another customer who called the store to ask a similar question.

He kept pressing, and says he “was told that the store used a device to calculate the conversion rate applicable to each item, but that this device had been lost.” He reported the issue to a manager, “was told that no such device existed,” but was assured that the exchange rate was accurate.

Not so fast, says his complaint: that day’s exchange rate should’ve brought the per-shirt total to $11.26 each. The shopper says that Zara’s U.S. arm, owned by Inditex, “has perpetuated a corporate policy of misinforming consumers” with these kinds of alleged shenanigans.

“[T]he conversion rate is entirely misapplied — to the extent it is even applied at all — such that U.S. consumers are paying far more than the true prices of the products,” the complaint says. Furthermore, Zara’s practice of using euro pricing confuses customers “and lures them to the register,” where they are charged inflated prices that aren’t based on real exchange rates, according to the lawsuit.

The plaintiff’s attorney says he’s found these issues are widespread, after checking various stores, and that he’s bringing the lawsuit against Zara to compel it to “be a transparent and responsible corporate citizen by ceasing its practice of defrauding customers and making whole those consumers who have been victims of its deceptive practices.”

“Behind its façade of attainable elegance, Zara is engaged in a widespread practice of deceiving American consumers through a classic bait and switch… being unjustly enriched to the tune of billions of dollars,” the lawsuit reads.

In a statement, Zara USA denied the allegations regarding deceptive pricing practices.

“While we have not yet been served the complaint containing these baseless claims, we pride ourselves in our fundamental commitment to transparency and honest, ethical conduct with our valued customers,” the company said in a statement. “We remain focused on providing excellent customer service and high-quality fashion products at great value for our customers. We look forward to presenting our full defense in due course through the legal process.”

The lawsuit is seeking class certification, restitution, and punitive damages for fraud, negligence, unfair business practices, and unjust enrichment.

Class Claims Zara Stores Defraud Americans [Courthouse News]