Hobby Lobby Accused of Using “Sham” Deals to Entice Customers to Buy Branded Products In Lawsuit

A Hobby Lobby store in Orem, Utah, is seen here.

Sometimes, advertised deals aren’t what they seem to be. And that could be the case at arts and crafts retail chain Hobby Lobby, which was accused in a federal lawsuit filed this week in California of using “sham” deals to entice customers to buy its branded products.

The 60-page suit alleges that the Oklahoma City, Oklahoma, company employed fraudulent business practice by using false reference prices to fool consumers into thinking they’re getting a good deal. According to the filing, the “marked” price doesn’t represent a “bona fide” price at which Hobby Lobby sold a substantial quantity of merchandise for a “reasonable period of time,” as required under Federal Trade Commission rules.

“Retailers, including Hobby Lobby, understand that consumers are susceptible to a good bargain, and therefore, Hobby Lobby has a substantial interest in lying in order to generate sales,” the lawsuit said. “A product’s ‘regular’ or ‘original’  price matters to consumers because it serves as a baseline upon which consumers perceive a product’s value.”

The case seeks to stop Hobby Lobby from engaging in allegedly unethical and deceptive practices and to correct the misleading impression that consumers have about its branded products.

A spokesman for Hobby Lobby declined to comment for this story.

San Diego resident Christina Chase is the lead plaintiff in the case, which is seeking class action status.

According to the filing, Chase purchased a 5-inch by 7-inch Green Tree Gallery Shadow Box Display Case Photo Frame for about $8.99 around March 1 at a Hobby Lobby store in La Messa, California. A white price tag on the back of the item showed the “marked” price as $17.99. There also was a white placard with the words “Photo Frames 50 percent Off the Marked price” in red and black print.

“However, this product was never offered for sale or sold at the $17.99 price, nor was it offered for sale or sold at that price within the 90-day period immediately preceding Ms. Chase’s purchase,” the court filing says.

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Jonathan Berr