The new lawsuit against Shein alleges that the company’s use of discounts on almost all items amounts to fraud, deception and false advertising.
Shopping at Shein is almost an upgrade: Load up the app or website and you’ll see big coupons and big discounts, like “$39.99” T-shirts marked down to $4.99.
The discounts can be hard to believe. The final prices, however, make more sense in the context of what you’re buying: cheap fast fashion from China.
According to the lawsuit, the issue isn’t just that Shein is providing great sales. Those are so-called “false” reference prices because Shein’s items are rarely or never sold at full price, according to the lawsuit, which cites historical price data from AliPrice.com and Microsoft Shopping.
In other words, the plaintiffs are actually accusing Shein of using the fashion space as one of those furniture stores that always seem to be “going out of business” but never seem to go out of business.
“Shein presents itself as the first company that the consumer ‘puts.'[s] customers from the heart of our business’ by bringing fashionable items that are ‘accessible to all,'” reads the 60-page complaint in the case, Severino v. Shein US Services LLC. “However, its purported ‘sales’ are little more than deception intended to entice customers to buy items at ‘discounts’ compared to deceptive and misleading reference prices.”
The lawsuit accuses Shein of selling deceptive products
The lawsuit comes after Shein was forced to pay a 40 million euro fine in France for misleading pricing practices, and lawyers and plaintiffs behind the class action are hoping for a similar outcome for American consumers.
The US lawsuit was filed in the District Court for the Northern District of California on May 5. Shein has not responded to the lawsuit, and the company did not immediately respond to Mali’s request for comment.
The company may want to dismiss the lawsuit, while the plaintiffs will likely try to pursue compensation on behalf of two proposed classes: California residents who shop at Shein and a national class of consumers, including anyone who bought the item at a discount in the past few years.
The proposed national class is large, as the lawsuit asserts that “all or nearly all of the reference prices on the website are false and misleading.” Almost everything on Shein’s site is on sale, and the lawsuit argues that almost all of those discounts are “fake.” Shein may try to argue in court that customers are familiar with this style of shopping and are not misled by their sales. However, the case argues otherwise.
“This deceptive practice has allowed Shein to reap billions of dollars in revenue from the US alone, all at the expense of unsuspecting customers who believe Shein’s retail prices are genuine, discounted, retail prices,” the complaint reads.
The three plaintiffs named in the lawsuit are all Shein customers in California. For example, Stacee Severino bought a one-size-fits-all floral print dress in early March for $10.81, a charge she says she wouldn’t have bought if she’d known the sale (a markdown from $18.59) was fake.
