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Michael Kors Agrees to Pay $4.8 Million to Settle Lawsuit Over 'Deceptive' Price Tags

Or: 10 Reasons Not to Mess With Outlet Shoppers.
The designer. Photo: Imaxtree

The designer. Photo: Imaxtree

While it's generally best to assume that brands are pulling marketing tricks on consumers in one way or another, Michael Kors is now suffering the after-effects of one of its sneakier selling tactics. On Friday, the brand agreed to pay $4.8 million to settle a lawsuit from last July claiming that it had created the illusion of a discount on its outlet store price tags where there was none. 

The original suit was filed by a California woman named Tressa Gattinella, who "was induced" to buy a pair of "Side Anklez White jeans" that were labeled with a $120 MSRP (Manufacturer Suggested Retail Price) and priced at $79.99 because she thought she was saving 33 percent. Very Garden of Eden. The problem, according to her complaint, is that Michael Kors manufactures products specifically for its Kors Outlet stores — so putting a retail price comparison on the tag is misleading. Or in the words of Gattinella's complaint, "false and fraudulent."

While the settlement still needs court approval, Kors has also agreed to stop labeling its price tags in that way and to provide in-store displays explaining pricing terms. The term MSRP could be replaced with a "value" designation.

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We'd call this a victory for eagle-eyed bargain hunters everywhere.