A class action filed against Warren Buffett-owned jewelry chain Helzberg Diamonds alleges the website claims products are being offered at discounted prices for a limited time, when the sales and prices are actually fake.
Helzberg, part of the Berkshire Hathaway conglomerate of businesses, advertises “made-up regular prices and made-up discounts” online to urge customers to make the purchase, and make it quickly, according to a complaint filed recently in a California federal court. In reality, the sales have no time limit, and when one ends, the next one begins, offering the same price, thus devaluing the jewelry and making the sale price the true one, the filing argued.
“Reasonable consumers do not realize the fake nature of the sale,” it stated. “It is not apparent from merely purchasing the high-priced products, because the sale appears to be a bona fide sale. Consumers do not have any reason to go back to the website day after day to discover there is still a sale. And even a consumer who occasionally checks the website would reasonably believe that there happened to be another sale, that the sale is not limited in time, that the discounts are fake, and that the advertised regular prices are fake.”
When presented with discounts, consumers are “substantially” more likely to make the purchase, the suit maintained. Research counsel carried out for the plaintiff found that “nearly two-thirds of consumers surveyed admitted that a promotion or a coupon often closes the deal if they are wavering or undecided on making a purchase,” and that “two-thirds of consumers have made a purchase they weren’t originally planning to make, solely based on finding a coupon or discount.”
The false advertising harms consumers by inducing them to make purchases, thus artificially inflating demand, and allowing Helzberg to raise the prices of those goods, meaning buyers are actually paying above value for the products, the filing claims.
The complaint is requesting an injunction against the jeweler, preventing it from holding “fake” sales, as well as damages, payment of attorney’s fees, and a refund in full of the price of the jewelry purchased.
Image: A Helzberg Diamonds store in Orlando, Florida. (Shutterstock)
