The courts may eliminate MSRP as we know it – as a fabricated price that usually serves no purpose except to dupe buyers into thinking they’re getting a good deal.
Parties in several lawsuits have argued that MSRPs bearing no resemblance to prevailing market prices constitute deceptive trade practices.
Two customers sued Amazon (pdf) in 2014, saying its overinflated list prices violated false advertising laws. The case was dismissed because Amazon customers, by contract, waive their rights to legal action.
Last month, according to the New York Times, a proposed class-action suit was filed against Wayfair in California claiming the retailer falsely advertised discounts for items it had never sold at a higher price.
“The referenced former retail prices were fabricated,” the plaintiffs claimed, according to the Times.
The latest case involves Overstock.com, which is currently appealing a decision in California after a lower court found the online merchant liable for false advertising. The court concluded that Overstock willfully inflated list prices to exaggerate customer savings, fining the merchant $6.8 million for the wrongdoings.
In its appeal, according to the Times, Overstock said it was following standard industry practices.
The paper notes the Federal Trade Commission makes clear its stance on “list” pricing in its Code of Federal Regulations:
To the extent that list or suggested retail prices do not in fact correspond to prices which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer.
