Mega Retailers Accused of Misleading Price Scheme

The Los Angeles city attorney is suing Macy's, JC Penney, Sears and Kohl's for allegedly using "false reference pricing" with customers.
2:25 | 12/09/16

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Transcript for Mega Retailers Accused of Misleading Price Scheme
Hours of peace. Another alert. Four major stores being accused of misleading shoppers with their sale prices and Paula Faris is tracking that and those big deals may not be as big as they look. Reporter: Are these advertisers ever selling that item for that original retail price listed on the tag? The California city attorney who filed the suit believes four major retailers are engaged in deceptive advertising. He wants them fined and is seeking an injunction to prevent them from using this shady advertising tactic. This morning, just in time for the holiday shopping rush, the L.A. City attorney is suing four major retailers accusing them of making customers believe they're getting a better deal than they actually are. Customers have the right to know the truth about the prices they are paying. Reporter: Macy's, JCPenney, sears and Kohl's all allegedly using false reference pricing. The lawsuits claim in January, Kohl's allegedly advertised the sale of belted cargo shorts for a sale price of $35.99 from an original price of $60. But the shorts the lawsuit cams were never sold for more than 35.99 and in April the complaint states, sears advertised a Kenmore washing machine with a regular price of $1,179.99 for a sale price of $999.99 even though sears allegedly never offered that item for more than $999.99. Also according to this lawsuit, Macy's prominently advertises that its false discounts are being offered for only a limited time in order to create a false sense of urgency and to mislead customers that they will miss out. A lawsuit like this sends a very strong mess ago to the retail market that if they are engaging in false advertising, that they'll think twice about those practices. Reporter: JCPenney, sears and Macy's tell ABC news they do not comment on pending litigation. Kohl's did not respond to a request for comment. And this lawsuit could have real effects across the country as well since nearly every state has laws similar to California in regards to deceptive advertising. It really sends a message for them to stop false advertising. Maybe it wasn't on sale to begin with. I'm a sucker for the line that goes through. Yes, I'm getting a deal, right? I got it for 98% off. You and me both.

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

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