Legal News

A very small price hike has amounted to a pretty big problem for the 99 Cents Only Stores. The west coast retailer is facing two potential class action suits in Los Angeles County Superior court over the price hike. It seems that at most consumers didn't realize a fractional price increase of .99 cents was now included in their "99 cent" price.

The Los Angeles Times reports that some customers felt duped over the tiny price increase. Since it is not possible to pay a fraction of a penny in U.S. currency, anything in the store priced at 99.99 cents will actually cost consumers $1 plus tax at the cash register. "If they call themselves 99 Cents Only, it should be 99 cents," Dan Callahan, an Orange County lawyer, told the Times.

Callahan goes on to say that before filing suit, he did some research. In a survey of 99 Cents Only store customers, he found that almost no one realized they were actually being charged more than 99 cents for an item. "The people who go to that store are typically lower income or seniors, so the people they're taking advantage of are the ones least able to discern the difference and least able to afford it," Callahan said.

The suits are asking for class action status and claim a currently unspecified amount of damages. The complaints allege unfair and deceptive business practices and misleading advertising.

Eric Schiffer, chief executive of 99 Cents Only, says the company did nothing wrong. He believes they did everything they could to let their customers know about the price increase. "We changed all the signs, we have a large poster in the window of every store explaining the increase, we put it in our ads in the newspaper, we put it on the radio," he said.

According to the Times, 99 Cents Only opened its first store in Los Angeles in 1982 and has since expanded to about 275 locations, mostly in California but also in Nevada, Arizona and Texas.

Related Resources:

• Fair Advertising FAQ: A Guide for Small Business (FindLaw)
• Wrigley Settles Eclipse Gum False Advertising Lawsuit (FindLaw's Common Law)
• FTC Snaps Kellogg Co. for Misleading Claims about Cereal (FindLaw's Common Law)