J C Penney Company has settled a class action suit that accused the retailer of marking up merchandise prior to heavily discounting the same items.
J C Penney involved in classic bait and switch?
Cynthia Spann, the titled complaintent in the suit, thought she was scoring a massive deal when she purchased three blouses originally marked at $30 each for $17.99 with a 40% discount. However, Ms. Spann later learned that J C Penney had never sold the blouses for more than $17.99 in the three months prior to her purchase.
The proposed settlement will see the iconic retailer paying out $50 million to Ms. Spann and those that joined her in their suit against the company. The suit was filed by California shoppers in federal court and J C Penney, with the settlement, will offer either cash payments to the discontented or, less likely, store credit.
J C Penney denies all maleficence
J C Penney firmly denies any wrongdoing but wishes to put this distraction (it has many) behind it’s day-to-day. While the compliant suggest that the company was involved in a “massive, yearslong, pervasive campaign” to fool shoppers the retailer disagrees.
In the words of J C Penney spokesperson, the company agreed to settle simply “to eliminate the uncertainties, burden and expense of further protracted litigation.”
“While we are confident of our position, resolving this litigation removes any uncertainty and risk, which we believe is in the best interest of our shareholders,” Marvin Ellison, the retailer’s chief executive, said in a statement.
Additional agreements from Penney
$50 million is no laughing matter for a beleaguered company that answers to a board of directors. However, it’s hardly Penney’s biggest problem. The company has been in a bit of flux following the departure of CEO Ron Johnson in 2014. His hemming and hawing over whether or not the company was a discount retailer left consumers uncertain and in the lurch for years.
Following the settlement, J C Penney has agreed to make their advertising policies clearer for those seeking the brands carried exclusively by the retailer, like Liz Claiborne.
The company is not alone as there are pending cases against both Kohl’s and Men’s Warehouse for the same “violation.”