Zara has been slapped with a massive class-action lawsuit for allegedly engaging in deceptive pricing practices.
According to the $5 million–plus proposed lawsuit, which was filed by Devin Rose in the United States District Court for the Central District of California (a federal court in L.A.), Zara often only lists euro prices on clothing in its U.S. stores, which can confuse customers. Worse yet, the suit alleges that when shoppers get to the counter, they are being charged much more than the conversion rate.
Rose believes that "behind its façade of attainable elegance, Zara is engaged in a widespread practice of deceiving American consumers through a classic bait and switch."
Rose filed the suit after purchasing three shirts from a Zara store in L.A.'s Sherman Oaks neighborhood this past May. The suit says that when he made the purchases, "the actual euro-dollar exchange rate would have resulted in his €9.95 shirts costing approximately $11.26 each. Instead, however, Zara charged Mr. Rose $17.90 per garment, a markup of nearly 60%." Thus, he's asking Zara to start accurately converting its prices right at the register.
If the lawsuit does go through, "similarly situated" individuals — i.e., anyone who made a purchase at one of Zara's U.S. stores around the same time Rose did — can join the case and share the settlement amount.
On August 22, Zara released a statement in its defense. "Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States," a spokesperson told The Fashion Law in a statement. "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. 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."
But that wasn't enough for Rose. The next day, his counsel replied with another statement to TFL: "Zara's response so far has been beyond bizarre and desperate. Their unlawful conduct is not up for debate, as anyone who goes into a Zara store in the United States can see with their own two eyes that Zara is pricing clothing in euros and charging consumers drastically above the lowest tag price in dollars which is illegal. U.S. laws require that a retailer charge the consumer the lowest tag price — not grossly inflated amounts using fake conversion rates. If Zara wants to double down on its duplicity, instead of acting like a responsible corporate citizen and fixing the mess of its own making, they should be prepared to face the wrath of the American consumer and the full force of the law."
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