Who is facing a major lawsuit today? Zara.
The Spanish retailer has just been slapped with a $5 million lawsuit by the United States District Court for the Central District of California for engaging in "deceptive" pricing practices.
According to Devin Rose, the man who filed the suit, Zara has made it a practice to mislead customers by only listing prices in euros on clothing in its American stores. This leads to customers being charged a significantly higher exchange rate for garments when they hit the cash register.
Rose stated 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 decided to take action after purchasing three shirts at Sherman Oaks Zara in California this past May for $17.90 each.
According to the lawsuit, as stated by Cosmopolitan, "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 per cent."
So what does Rose want out of this lawsuit? For Zara to start accurately converting its prices right at the register.
On Monday, Zara released a statement to the Fashion Law in regards to the lawsuit:
"Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States. 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 this wasn't a good enough response for Rose who called the statement "beyond bizarre and desperate." He released his own statement to Fashion Law the next day:
"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."
Well, if you bought clothes from an American Zara around the same time Rose did, then you might just be in luck. You can join in the lawsuit and receive a cut of the settlement if Zara is found guilt of deceptive pricing.
May the odds be ever in your favour (we guess).