What Have Retailers Been “Up To” In New Jersey?
The last few years have been quite interesting for retailers, with a number of different pricing and advertising related legal issues coming to the forefront. Recently, another new front in this battle opened in New Jersey where a national clothing retailer became the subject of a class action related to its discount price advertising. This time the claim relates to a seemingly tried and true method of retail advertising– the use of “Up To X % Off” promotional messaging. This also marks the next chapter in our on-going discussion of “Up To” claims.
The suit, filed against JoS. A. Bank Clothiers, Inc., alleges that the retailer did not adequately display the minimum percentage of savings to customers when it used an “Up to 70 Percent Off” message and other similar messages in its advertising. The plaintiff, Michael Leese, alleges that this type of message violates New Jersey’s consumer protection laws, which require advertisements to state the minimum percentage of savings just as conspicuously as the maximum percentage of savings.
The suit alleges that Mr. Leese received an email in November 2016 from JoS. A. Bank advertising “Save Up to 70% During the Pre-Thanksgiving Sale” along with other specific callouts like “Pants up to 60% off” and “Up to 70% Off All Outerwear”. Mr. Leese alleges that he visited the store a few days later and saw a number of large signs repeating the “Up To” messaging as well as placards on various racks of clothing, none of which had the low range of the savings listed.
Leese contends that he selected an item from an “Up to 70% off” rack but the item was not 70% off. He also contends that the majority of items on the rack and in the store were not 70% off and that the specific percentage discount of the item that he bought was not disclosed anywhere before he made his purchase and also was not disclosed on his receipt.
The statute at issue in Leese’s complaint is N.J.A.C. § 13:45 A-9.5, which states in part that an advertiser offering merchandise for sale at a savings of a percentage or a range of percentages must also state the minimum percentage reduction as conspicuously as the maximum percentage reduction. The statute also requires that a retailer disclose the basis upon which the former price was established (i.e. “Our Regular Price”) in close proximity to the percentage reduction. Another part of the statute, (N.J.A.C. § 13:45 A-9.8) may provide some potential defenses to this claim which we suspect JoS. A. Bank will raise in their responsive pleadings.
In somewhat of a unique twist, Leese uses these allegations to try to make a claim under the New Jersey Truth In Consumer Contract, Warranty and Notice Act (“TCCWNA”) as well as under the New Jersey Consumer Fraud Act. He further seeks a declaratory judgment that defendant’s conduct was unlawful and also makes claims for unjust enrichment and breach of contract under an implied covenant of good faith and fair dealing.
While this case is just in the very early stages, it is likely that there will be more suits like this one being filed against other retailers in the days and weeks to come. So what can you do to protect yourself? There are a few things. An easy solution is to make sure that in states like New Jersey which have specific laws related to the use of “Up to” advertising you are disclosing the lowest end of the savings range in equal prominence to the highest end of savings. So instead of using a message like “Up to 70% Off” instead say “30-70% Off”.
You could also consider tweaking your messaging to speak to a dollars off range, instead of a percentage off message, as the statute as worded speaks only to “percentage reductions”. Another alternative would be to more narrowly craft your sale messaging so that you are focused only on products that have the highest savings. For instance, instead of saying “Watches Up to 80% Off” you could say “Timex Watches 80% Off”.
Also, be sure to check your register receipt messaging (an area that can sometimes be easily overlooked) to make sure that the way the discount prices are presented doesn’t run afoul of the statute.
Navigating pricing compliance on a state by state basis can be daunting. We are here to help. In the meantime, retailers should keep a close eye on this case. The name of the case is Michael Leese, on behalf of himself and all others similarly situated, v. JoS. A. Bank Clothiers Inc., case number L-0437-17, in the Superior Court of New Jersey, County of Burlington.