TJ Maxx is known and praised by bargain hunters everywhere, but are the deals too good to be true? That is what four Florida shoppers are alleging in their class action lawsuit against the retailer. They claim that TJ Maxx is violating the Deceptive and Unfair Trade Practices Act by leading consumers to believe that the prices are a steal when they actually are not.
For those not familiar with TJ Maxx, the retailer sells name brand goods at a discounted price. They tag their goods to show the retail price and TJ Maxx’s discounted price. The comparison shows shoppers the deal they are getting, which is often 20% to 60% off. The class action lawsuit alleges the retail prices are made up and inflated to create “phantom markdowns.” The plaintiffs claim in the lawsuit that “this practice also serves to falsely convey the impression to the consumer that the good in question is of such quality that it is worth that higher 'Compare At' price, when, in fact, the item's actual value is far less.” This mentality makes the consumer more likely to purchase the good because they falsely believe they are getting a great deal.
TJ Maxx’s parent company TJX Companies released the following statement in regards to the lawsuit “At T.J. Maxx, we are committed to delivering exceptional value to our customers every day – it is the foundation of our business. We tell our customers what we mean by ‘compare at’ prices, both through signage in our stores as well as language on our T.J. Maxx website.” TJ Maxx’s website claims the only time they create a “compare at” price is when there is no retail price for a good. They create the “compare at” price by looking at the price of similar goods of comparable quality.
This is not the first time that TJX Companies has come under fire for this issue. In 2015 a class action lawsuit was filed in California against TJX Companies for using deceptive pricing tactics. A California Judge ruled in favor of the plaintiffs and TJX settled for $8.5 million.
Don’t get tricked by “phantom markdowns,” next time you are at a discount retailer like TJ Maxx, google the items you are interested in and see if the deals are all they are promised to be.