Old Navy Hit With Suit Alleging Bogus Sales, Made-up Prices

Gap Inc. and unit Old Navy LLC has joined the ranks of retailers targeted with suits alleging they entice shoppers with fake sales and made-up reference prices.

Old Navy advertises perpetual or near perpetual discounts—typically a purported savings of 30% to 60% off—from its self-created list prices for the products, which are exclusively offered by Old Navy, a new lawsuit filed in a federal court in Washington state alleges.

But Old Navy rarely if ever offers most products at the advertised list price, Washington resident Anna Nemykina alleges.

Decades of academic research has established that the use of reference prices ...