In March, a group of pro-consumer California district attorneys sued Amazon about misleading savings claims, and settled the case just one week later. Amazon agreed to pay a $2-million penalty.
For decades, Amazon has advertised fictitious savings from bogus reference prices like “list prices” or “was” prices, making shoppers believe they were saving a bundle by buying from them. In 2017, we reported on a study that demonstrated Amazon was still up to its old tricks despite seemingly having found consumer religion the year before as a result of several lawsuits about their misleading savings claims.
As a current example, in late March 2021, Amazon advertised a Cuisinart hand mixer (HM-90S) for $79.95 — a claimed savings of 45% off the so-called “list price” $145.
But a quick check over at the manufacturer’s own website reveals that Cuisinart
itself is selling this very model for the same $79.95, as are a host other big name retailers.
Worse, Amazon itself has never charged more than $88.94 in the past 10 years for this mixer according to CamelCamelCamel
, and a review of the prices being charged for this very mixer at nearly 100 other retailers reveals that no one is charging Amazon’s claimed $145 list price
As of April 2, surprise, surprise, Amazon actually changed its advertising for this mixer and eliminated the misleading list price:
UPDATE: Eagle-eyed reader Kim W. visited Amazon on April 5, and discovered the company once again began advertising a savings of 45% for this mixer and it restored the same high list price albeit this time with a “details link” explaining how it was derived.
Under the terms of the just-announced settlement, Amazon is barred from using false or misleading reference prices, and it must include a hyperlink to a “clear and exact definition of the [reference] term” they used and a “statement that the List Price may not be the prevailing market price or regular retail price.”
Our view: Having Amazon tell customers that the reference price they display is not the real prevailing price in the marketplace does nothing to change the misleading nature of their list price savings claims. And it seems to violate the very California law that formed the basis of the DAs’ lawsuit against the company.
Bottom line: If the list price is not the price charged by a reasonable number of sellers, it should not be allowed to be used.