T.J. Maxx Accused of Misleading Customers With 'Compare At' Prices

Two people have filed for a class-action lawsuit against the discount giant, claiming they're fooling customers with deceptive price tags.
4:03 | 07/23/15

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Transcript for T.J. Maxx Accused of Misleading Customers With 'Compare At' Prices
and this morning's hot button. Department store T.J. Maxx accused of misleading customers about their discount deals. ABC's Becky Worley has the details. You can go to T.J. Maxx and have it all for up to 50% off department store prices. Reporter: T.j. Maxx, the price reduction giant asells itself on being one of the best bargains in the business. But this morning the discount dealer under fire after two individuals filed a proposed class action lawsuit against T.J. Maxx claiming it's using deceptive comparative prices to trick its customers into mistakenly believing they're saving specific and substantial amounts on name brand items. Consumers now questioning the accuracy of those compare at prices. In a statement to ABC news T.J. Maxx says "We tell our customers what we mean by compare at prices, transparency is important to us and integrity is ingrained in our culture. Beyond that we do not comment on pending legislation. They'll be looking at this price tag and not really understanding what that price that is compared at actually means. Reporter: We decided to check it out for ourselves at this T.J. Maxx in San Jose. Their compare at signage posted right at the door but the price behind this Michael kors purse not so clear. The T.J. Maxx tag says compare at $328 but the manufacturer has its own tag with a suggested price of 228 and when I search online I find it for way under the compare at price. It's $278 at both Macy's and neiman-marcus. In our brief visit to one store, most of the compare at prices seemed appropriate. But some weren't. This five-pack of men's undershirts says care at $30. But a quick check online found them at $19.99 at Macy's, the same as taj max meaning being a maxxinista could save you money. For "Good morning America," Becky Worley, ABC news, San Jose. I'm here with Lisa lee Freeman. There's a name, price anchoring. T.j. Maxx isn't the only one doing it. A common trick stores do. They give you one reference point and to show you what a great deal you're getting. Sometimes it can be deceptive. For example, the compare at is one example of that. But they also use crossouts. Let me show you so, for example, they cross out the original price and then they show you the sale price and you think, wow, what a great deal and whether it's legit or not you think, fabulous. And you've snapped it up. Another example is goldilocks pricing where they want you to spend the $59 in this case and give you a high price and cheap price that is too bare bones and steers you to the $59. What other head games? Another trick is multiple unit pricing and say, for example, you need to buy ten to get the $10 deal but in many cases you only need to buy one to get the $1 deal. Another example is limited quantities. For example, they say five per customer to get the $3 and you think, my gosh, I can only buy five so you end up buying all five to get the great deal and end up buying more -- Even if you didn't need five. That's right. You have this information. What should shoppers do? To protect yourself bring your cell phone with you. Your smartphone. Check prices while in the store. Do a Google search or bar code scanner like red laser or smart savvy. Don't buy anything if you don't need it. It may not be as big a bargain as you think and see if there is a coupon. Retail me not and coupons.com and see if there is a coupon, get the good deal. Lots of good advice. Thanks. Back to Michael.

This transcript has been automatically generated and may not be 100% accurate.

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