California’s comparison pricing rules are not new. What is new is the accelerating wave of class action lawsuits targeting ecommerce brands over routine “Was/Now” and reference pricing practices.

Over the past year, plaintiffs’ firms have significantly increased filings alleging that advertised “original” prices were not bona fide prevailing prices. These cases are increasingly directed at online retailers whose pricing histories are easy to track, archive, and analyze.

For ecommerce brands that rely on promotional pricing to drive traffic and conversions, the risk environment has shifted.

The Legal Framework Has Been in Place, Enforcement Has Intensified

At the federal level, the FTC’s Guides Against Deceptive Pricing require that a former price reflect a bona fide price at which the product was genuinely offered for a meaningful period of time. Artificial or inflated “original” prices may be deemed deceptive.

California imposes stricter guardrails. Under Business & Professions Code § 17501, a former price generally must have been the prevailing market price within the prior 90 days, unless clearly disclosed otherwise. Claims may also trigger liability under the Consumers Legal Remedies Act (CLRA) and California’s false advertising laws.

The legal standard is straightforward: comparison pricing must be real, recent, and substantiated. 

While the rules themselves haven’t changed, what has changed is the litigation climate. And the result has been a recent wave of class action lawsuits.

Who Is Being Sued and Why

Plaintiffs’ firms have targeted national retailers and ecommerce brands across apparel, beauty, home goods, and consumer products sectors. Common allegations include:

• Products were rarely or never sold at the advertised “original” price
• Continuous markdown cycles rendered the higher price fictitious
• Consumers were misled about the true amount of savings

These lawsuits are often filed as class actions seeking restitution, statutory damages, injunctive relief, and attorneys’ fees. Even where cases settle, defense costs and reputational harm can be substantial.

Major retailers including Amazon, Calvin Klein, The Children’s Place, Dressbarn, Eddie Bauer, JCPenney, Pier 1 Imports, Shutterfly, and Zales have faced strike-through and false reference pricing litigation in California and nationwide. In enforcement actions, Amazon agreed to a roughly $2 million settlement, and a court ordered Overstock.com to pay nearly $7 million in a California comparison pricing case.

Recent filings underscore that strike-through pricing litigation is ongoing and accelerating. For example, a January 2025 class action against Patagonia alleges that the company advertised inflated reference prices and perpetual discounts that did not reflect genuine prevailing prices, asserting violations of California consumer protection statutes and FTC pricing guidance. Legal commentators also report a steady stream of new California Business & Professions Code § 17501 lawsuits against both national brands and ecommerce retailers, reinforcing that comparison pricing claims are now a sustained and growing area of plaintiff activity rather than isolated enforcement events.

Why the Spike Now?

According to recent legal industry reporting, deceptive pricing class actions including strike-through and reference pricing claims have doubled over the past year, signaling that what was once sporadic litigation is now an accelerating enforcement trend for online retailers.

Several factors are driving the recent increase:

1. Ecommerce transparency. Online pricing histories can be tracked and preserved with ease. Plaintiffs can analyze pricing data over time to challenge whether a “regular” price was ever meaningfully charged.

2. Always-on promotions. Many ecommerce brands rely on frequent or perpetual markdown strategies. Without careful documentation, this can create vulnerability under California’s 90-day rule.

3. Favorable class action dynamics. California’s consumer protection statutes, combined with CLRA claims, create significant leverage for plaintiffs – including statutory damages and attorneys’ fees.

4. Broader regulatory attention to pricing transparency. Heightened scrutiny of deceptive pricing practices at both the state and federal levels has emboldened private litigants.

5. A well-known enforcement playbook exists. Proven economic incentives encourage more filings. Settlement and judgement outcomes will almost always fuel more demand letters and suits, because they show courts and enforcers will act.

Why This Matters for EIA Members

Discounting is foundational to ecommerce growth. But unsupported strike-through pricing can quickly become a class action exposure, even when businesses believe they are following standard industry practice.

Because online sellers operate nationally, California compliance often becomes the de facto standard across all markets. For small and mid-sized ecommerce brands, even one lawsuit can divert resources away from growth, hiring, and innovation. This is not simply a marketing issue. It is a board-level risk management issue.

What Brands Should Do Now

Ecommerce businesses should:

• Ensure automated systems retain documentation validating any  comparison pricing presented on the site
• Review perpetual discount strategies for compliance with California’s 90-day rule
• Align marketing, merchandising, and legal teams on substantiation standards

Strike-through pricing remains lawful — but it must be defensible.

EIA will continue monitoring enforcement trends and advocating for clear, consistent standards that protect consumers while ensuring fair expectations for ecommerce businesses.

Join the EIA today to help strengthen and shape policies that affect all ecommerce businesses. Together, we can continue to create the future of ecommerce. Subscribe to EIA email updates to stay informed on key developments and their impact on your business.