Those deep discounts on online discount superstore Overstock.com may not be such a steal after all. The e-commerce merchant has been found liable for false advertising and unlawful business practices and ordered to pay $6.8 million in civil penalties.
The Sonoma County District Attorney on Thursday said Overstock overstated customer savings. Overstock claims that most customers understand that a list price tends to be the full retail or manufacturer's suggested retail price, but the court mandated that Overstock.com explain its pricing more clearly on its website.
The matter originated in 2007, after a shopper saw a patio set for sale on Overstock.com for $449. Overstock displayed on its website a comparison price, which claimed that other retailers were charging $999.99 for the same patio set. The individual purchased the patio set from Overstock, but later found a sticker on the patio table, which showed that the set was actually selling for $247 at Walmart. A group of California district attorneys subsequently sued Overstock in 2010, saying the company "routinely and systematically" gave false and misleading prices of products.
The company said it would appeal a court ruling saying that pricing diverged "widely from industry standards."
-See this SF Gate article
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