Although the company president says the California-based chain has “basically bombard[ed]” its customers with notifications about its price increase to 99.99 cents an item, class action lawyers say it’s unfair and misleading. [L.A. Times] One reader is reminded of the words of Lionel Hutz: “Mr. Simpson, this is the most blatant case of fraudulent advertising since my suit against the film, ‘The Never-Ending Story.’”
P.S. Orange County attorney Dan Callahan, described as having filed one of the suits, looks to be the same Daniel Callahan of Callahan and Blaine who has appeared in these columns twice before.
9 Comments
Next he will sue Motel 6, since they no longer charge $6 for a room. In the 1970s, the 6 in their name referred to the price of a room. Somebody once sued them because they tripped in the dark when according to their spokesman Tom Bodett “we leave the light on for you”.
I have to agree with the class acion lawyers on this one. Everything is not “99 cents ONLY”.
The California Attorney General fraud division would be a better way to handle the situation though.
I have to disagree with Scott and the class action lawyers. If the store advertised its products as all being priced at “99 cents only”, one could argue about whether actually pricing them at 99.99 cents constituted fraud. The NAME “99 Cents Only Store” is not, however, reasonably construed as making such a representation any more than “Jones’ Bakery” constitutes a representation that the bakery is actually owned and operated by a person named Jones. (Some names do make representations about some elements of their names, e.g. “Jones Kosher Butcher” had better be kosher, but these are special cases.)
Bill – the problem lies in the fact that cash registers are only able to register prices in $0.01 increments. Thus, goods that are advertised at $0.99 have an actual price point of $0.9999 and get rounded up to $1.00 at the register – that’s a cent per dollar difference.
Remember in the movies how the bad guys try to steal a fraction of a cent on a transaction – that’s what’s happening here. $0.01 may be an insignificant injury to the individual, but it adds up to billions in revenue for the store – redirecting that money from other (consumer intended) uses. This is exactly the injury that class action suits are designed to remedy.
I doubt the store does 200,000,000 in business. Rather than a private suit, it seems more like something for the Atty. Gen. to tackle if they believe it is of value.
Ben,
You’ve missed my point, which is about whether the name of the store makes a representation as to price. Your point is relevant to the extent of the fraud, on the assumption that the name makes such a representation.
Any book with ‘Complete’ in the title (i.e. ‘Complete Guide to Fishing’) needs to be withdrawn from the market immediately (unless they can prove it is truly complete). No book I have ever read with ‘Complete’ in the title has ever been truly complete.
[…] Expensive 99p store: “99 Cents Only Stores sued over price increase” – to 99.99 cents (Overlawyered) […]
Actually the store problably had to raise the price a cent due to the inflation, a company has to maintain a certain amount to have a profit nobody wants a business with no revenue