Nike and Lululemon face discount lawsuits
Nike and Lululemon face discount lawsuits over phantom discounts and inflated prices.
Nike and Lululemon are facing class‑action lawsuits in California that allege the companies used “phantom discounts,” showing inflated original prices to make sale prices appear more attractive.
Details of the Lululemon complaint
In Los Angeles Superior Court, plaintiff Annette Cody claims Lululemon listed products with fictitious regular prices and then struck them through to suggest a discount that never existed. She says she bought a pair of Wunder Train high‑rise tights in April for $59, with a crossed‑out price of $98 displayed as the former price. The $98 price had not been offered on the retailer’s website since October 2025, making the discount deceptive.
The lawsuit argues that such pricing violates California’s False Advertising Law, which requires that any listed former price reflect the true market price within the prior 90 days unless the retailer discloses when the product was actually sold at that price. Lululemon did not respond to a request for comment.
Nike’s similar allegations
A separate filing earlier this month targets Nike for comparable practices. The complaint says the brand displayed a reference price of $190 for black Air Max 2017 sneakers while offering various sale prices between September 8, 2025 and March 14, 2026. The suit contends the shoes had been continuously discounted throughout that six‑month span, making the advertised “original” price misleading.
The case seeks relief for every California consumer who purchased the brand’s products through its direct‑to‑consumer website or app at a discount from a higher advertised reference price since July 21, 2022. A Nike spokesperson said the company does not comment on pending litigation.
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Both cases hinge on the same statutory requirement: the advertised strikethrough price must be based on a genuine market price from the recent past, not an arbitrary figure meant to inflate the perception of a deal.
Attorney Rob Freund, who specializes in advertising and e‑commerce law, notes that false‑discount lawsuits have been filed for decades, but the volume appears to be rising. He observed that the number of such suits filed in 2025 was roughly double that of the previous year.
In addition to the two companies, other brands—such as Vego Garden—have recently faced similar accusations, indicating that the issue is not confined to athletic apparel.
From a broader perspective, the surge in litigation reflects growing consumer vigilance about pricing amid rising costs across many markets. When shoppers feel that prices are climbing, they tend to scrutinize discounts more closely, which can spur legal challenges if they believe they have been misled.
Associate professor Anita Rao of Georgetown’s McDonough School of Business explained that strict California regulations require the advertised strikethrough price to be based on the true market price within the last 90 days. She added that most consumers do not conduct detailed searches, allowing deceptive tactics to persist without substantial public scrutiny.
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Rao also pointed out that retailers often view these tactics as low‑risk, especially if they believe the practice boosts conversion rates. Her research suggests that showing a low entry price while the actual cost may be much higher can increase consumer engagement, though this approach does not necessarily involve outright deception.
Legal experts say that meaningful change may depend on third‑party oversight rather than individual shopper effort. When regulators, lawyers, or consumer groups identify patterns of inflated reference prices, they can bring enforcement actions that compel retailers to adjust their pricing disclosures.
The outcomes of the Nike and Lululemon cases could set precedent for how companies present discounts online, particularly in jurisdictions with stringent false‑advertising statutes. If courts enforce stricter compliance, retailers may need to revise their pricing strategies to align displayed reference prices with actual recent market values.
The cases are still pending.
