The J.C. Penney Company recently announced that it has reached a settlement to resolve a false advertising class action lawsuit that alleged it had engaged in deceptive discount pricing. 

The J.C. Penney Company recently announced that it has reached a settlement to resolve a false advertising class action lawsuit that alleged it had engaged in deceptive discount pricing. According to the complaint, which we discussed in a previous blog post, JCPenney falsely advertised the “original” prices, “sale” prices, and corresponding discounts for its private and exclusive branded apparel and accessories in order to deceive consumers into believing they were receiving heavy discounts.

Although JCPenney denies any wrongdoing, it agreed to settle the lawsuit by paying $50 million to class members. Class members will have the option of selecting a cash payment or store credit. The amount of the payment or credit will depend on the total amount purchased by each class member during the class period. Also as part of the settlement, JCPenney has agreed to improve its pricing and advertising policies, including by implementing periodic monitoring and training programs to ensures compliance with applicable advertising laws.  

Tip: As consumers continue to file class action lawsuits alleging deceptive pricing practices by retailers, it is important to remember that under state and federal law, retailers must sell items at the “original price” for a “reasonably substantial period of time” before they may advertise markdowns from that price.