As of Thursday, August 25, 2016
Walk into a Zara store in the United States and you will find that the price tags on the clothes are marked in euros, the currency for the European Union, with a sticker placed over it with the price in U.S. dollars.
But a Los Angeles consumer who filed a $5 million–plus class-action lawsuit against the Spanish retailer maintains that someone isn’t doing the math correctly when figuring out what a euro is worth in dollars.
In a lawsuit filed in U.S. District Court against Zara USA, Devin Rose said that on May 17 he went to a Zara store in the Sherman Oaks neighborhood of Los Angeles and bought three shirts priced at 9.95 euros. There was no sticker with the dollar price, which is often calculated higher than the current exchange rate. When he went to the cash register to purchase the shirts, he was charged $17.90, an approximately 58 percent markup from what should have been calculated as $11.26.
Los Angeles attorney Mark Geragos, who filed the lawsuit on Aug. 19 on behalf of Rose, believes that shoppers across the country have been overcharged billions of dollars and are paying way more for their clothes than European shoppers.
In his lawsuit, Rose said he went to an employee to inquire about the inaccurate calculation and was told that the store used a euro-to-dollar conversion device to figure out the price but the device had been lost.
Talking to a supervisor, Rose said in his court documents that he was told that there was no conversion device but that the price was based on the correct exchange rate.
The following day, Rose said he called a Zara customer service line to ask the same questions he had posed to the store employee. The customer service employee told him that the conversion rate used was the one that prevailed at the time the clothing was manufactured, court papers said.
In a statement, Zara USA said it denies any allegations that the company engages in deceptive pricing practices in the United States. “While we have not yet been served the complaint containing these baseless claims, we pride ourselves on our fundamental commitment to transparency and honest, ethical conduct with our valued customers. We remain focused on providing excellent customer service and high-quality fashion products at great value for our customers. We look forward to presenting our full defense in due course through the legal process,” said a Zara USA spokesperson.
Rose is bringing this class-action lawsuit on behalf of all shoppers in the United States and California who feel they were overcharged by the fast-fashion retailer, co-founded in 1975 by Amancio Ortega, who is one of the world’s richest men, with an estimated net worth of $76.5 billion, according to Forbes magazine. Zara has some 6,200 stores in 70 countries.
The lawsuit claims negligence, unfair business practices, unjust enrichment and fraud on behalf of Zara. Rose and his fellow plaintiffs are asking for damages, punitive damages, attorney fees and that Zara launch a corrective advertising campaign.