Banana Republic 'Luring' Shoppers With 'Deceptive' Sales?

Shopper accuses Gap-owned retailer of omitting fine print on window displays.

ByABC News
April 3, 2014, 1:07 PM
Pedestrians walk past a Banana Republic store in New York City, Jan. 6, 2014.
Pedestrians walk past a Banana Republic store in New York City, Jan. 6, 2014.
Jin Lee/Bloomberg/Getty Images

April 3, 2014— -- Clothing retailer Banana Republic has been sued for "luring" in shoppers with "deceptive" sale signs outside stores, according to a complaint filed in Los Angeles.

"Banana Republic deceives consumers and cheats its competitors by luring consumers" with advertisements “representing all of the products in the stores are on sale,” without indicating that the sale “applies only to certain products,” the lawsuit filed Tuesday with the Los Angeles County Superior Court alleges.

Sajid Veera of Redondo Beach, Calif., claims he saw an ad in the window of a Banana Republic store in El Segundo, Calif., and other stores that indicated sales such as "Today only - 40 percent off your purchase," according to his complaint.

He said he was "enticed" to enter the store because of the sign and selected several items to purchase, his suit states. But at the register, an employee told him the store wouldn't sell some of those items at discounted prices, the filing states.

A spokeswoman for Gap Inc., the parent company of Banana Republic, said the company does not comment on pending litigation.

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A spokeswoman for the Federal Trade Commission said there are no specific regulations dealing with fine-print disclosures for sales.

"But there is the general principle that the terms and conditions for the sale of any product or service must be clearly and conspicuously disclosed," Elizabeth Lordan of the FTC said.

Stores may be subject to applicable local and state laws, however.

Veera, 41, claims Banana Republic violates California's Consumers Legal Remedies Act for advertising goods with the intent not to sell them as advertised and the state's Business and Professions Codes for "unfair, fraudulent and unlawful business practices," claiming he and other consumers have been injured for more than $10 million.

His suit asks for an order requiring [Banana Republic] “to restore all monies that [it] acquired from [Veera] and the class as a result of their unfair methods of competition and unfair and deceptive acts and practices.”

Tod Marks, senior editor with Consumer Reports, said the "truth in advertising" laws that the FTC enforces have a litmus test to determine whether an ad is deceptive.

That is, he said, "How likely is this to mislead a reasonable consumer acting in a reasonable way?"

Companies often advertise sales and coupons and list the many exceptions to try to be more transparent with customers.

Consumer Reports criticizes companies that advertise sales with a litany of exceptions in its annual "Naughty" list. Marks said department store Lord and Taylor made the list in November because it advertised a one-day sale with 25 percent savings, but listed about 70 brands and categories that were excluded. Lord and Taylor has not responded to a request for comment.

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"That’s bogus. It’s irritating but at least you saw it," Marks said.

Veera is hoping to build his case into a class-action suit to include "hundreds of thousands" of other customers who purchased items beginning four years ago on days when Banana Republic stores in California displayed the alleged "deceptive" advertising, his lawsuit states.

Veera and his attorney have not responded to a request for comment.