Last week, a Zara customer filed a lawsuit against the company accusing it of misleading customers by posting some prices in euros and others in U.S. dollars, and of making up its own exchange rates to charge more for those items with price tags in dollars. The plaintiff’s lawyers now say they have even more proof of this pricing switcheroo.
The attorneys at Geragos & Geragos posted a video on YouTube (careful: you’ll want to turn the sound down unless obnoxious music is your thing) of a visit to a Zara store in downtown Los Angeles that they say shows the company is ripping off customers with its pricing tacts.
“Since Zara apparently thinks American consumers are stupid, we decided to take the #ZaraChallenge and see how much we would be ripped off in 10 minutes of shopping,” the caption reads.
In the video, they show price tags for individual items, both in euros and in U.S. dollars, and then a calculated “ripoff” amount. In one example, the price on the tag for a pair of black shoes is €39.99, which as of today Google’s currency converter says works out to about $45. So the $79.99 listed price on another tag for the same pair of shoes means Zara is charging $35 more than the euro price on the first tag, for a “ripoff” difference of 78%.
On another comparison, the camera shows a price tag of €29.95 on a navy cardigan, with another of the same sweater priced at $49.90, for a total discrepancy of about $16, or 48%, as the item should actually be about $33. All told, the lawyers claim that that shopping trip would’ve resulted in a total ripoff of more than $175, or 55%.
Might Zara simply be charging more for items sold in the U.S.? Perhaps, but the lawsuit claims that by including prices in both euros and dollars on the same items, consumers are confused into thinking they’ll pay slightly more in U.S. dollars, when in reality they shell out much more than the euro price would indicate.
“[T]he conversion rate is entirely misapplied — to the extent it is even applied at all — such that U.S. consumers are paying far more than the true prices of the products,” the complaint says. Furthermore, Zara’s practice of using euro pricing confuses customers “and lures them to the register,” where they are charged inflated prices that aren’t based on real exchange rates, according to the lawsuit.
Last week Zara called the lawsuit’s claims “baseless,” and said it prides itself in its “fundamental commitment to transparency and honest, ethical conduct with” its “valued customers.”
“We look forward to presenting our full defense in due course through the legal process,” the company said.
We’ve reached out to Zara US for comment on the video’s claims and will update this post if we hear back.
by Mary Beth Quirk via Consumerist