Fake Sale (Fictitious Former Price)

A fake sale is a promotion that compares today's price to a "was," "regular," "original," or "compare at" price that is not real. If a jacket is always "$100, now $50," the $50 is simply the price, and the "50% off" is a fiction. Outlet stores, online retailers, and furniture and mattress sellers have all faced these allegations.

The Federal Trade Commission's Guides Against Deceptive Pricing, at 16 CFR 233.1, address this directly. The FTC guide says a former price is a legitimate basis for a discount claim only if it is the actual, bona fide price at which the item was offered to the public on a regular basis for a reasonably substantial period of time. A price set high briefly, or one at which few or no sales were ever made, is considered fictitious. Many states have their own rules, and California law, for example, limits advertising a former price that was not the prevailing market price within the prior three months.

Fake sale class actions are usually brought under state consumer protection laws. The theory is that shoppers were tricked into buying, or paid more than they would have, because they believed they were getting a bargain. Defendants argue that shoppers got the product they paid for at a price they agreed to. Settlements often provide store credit or small cash payments, and many cases are dismissed or sent to arbitration.

Keep receipts, screenshots of the "was" price, and any evidence of how long the "sale" lasted. See our fake sale pricing lawsuit page and our BOGO deal entry.