Lululemon was sued last week in Los Angeles Superior Court by a customer who says the company's discounts were never real. Nike was sued weeks earlier on the same theory. Both cases allege the retailers displayed inflated "original" prices next to a strikethrough, making ordinary sale prices look like exceptional bargains.
The plaintiff in the Lululemon case, Annette Cody, says she bought a pair of Wunder Train high-rise tights in April, listed at $59 with a strikethrough price of $98, implying a $39 saving. Her complaint alleges that pair had not actually sold for $98 on Lululemon's website since October 2025. If true, the discount was fictional. The customer was never offered a lower price than usual. She was shown a fabricated one to make an ordinary price feel urgent.
The Nike complaint follows the same pattern. It alleges that a pair of Air Max 2017 sneakers, listed with a $190 reference price, had in fact been marked down continuously for at least six months between September 2025 and March 2026. The plaintiff's lawyers argue the sneakers were never sold at $190 in that period, so every "sale" price advertised against it was misleading.
Both cases rest on California's False Advertising Law, which requires that a retailer's stated "original" or "regular" price reflect a price the product actually sold at within the past 90 days, unless the advertisement clearly discloses otherwise. It is a specific, checkable standard. Either the product sold at that price recently, or it did not.
Legal and marketing experts note that inflated reference pricing is not new. Retailers have used it for decades to make markdowns look more generous. What has changed is the volume of litigation. Consumers, aided by price-tracking browser extensions and archived web pages, can now check a retailer's pricing history in seconds. The gap between the claimed discount and the real one is no longer invisible.
This matters well beyond Nike and Lululemon's scale. Any online seller running "was $X, now $Y" messaging is making the identical legal claim these two brands are now defending in court. A small ecommerce operator who sets an inflated list price purely to generate a discount narrative is exposed to the same theory of liability, and has none of Nike's legal budget to fight it.
The practical fix is straightforward. If a product is listed at a reference price, that price needs to be real: a price the item actually sold at recently, not a number invented to manufacture urgency. Sellers who want urgency without legal risk have safer tools available, including limited-time percentage-off promotions clearly tied to a stated end date, bundle offers, or loyalty pricing, none of which require a fictional "before" price to work.
Discount messaging built on a real price history earns trust that compounds. Discount messaging built on a fabricated one is now, demonstrably, a legal liability waiting for the right customer with the patience to check.
There is a second, quieter cost worth naming. Even sellers who never face a lawsuit pay a reputational price once shoppers learn to distrust strikethrough pricing generally. Price-tracking browser extensions have already trained a meaningful share of online shoppers to check a product's price history before buying. Every inflated reference price a retailer publishes, lawsuit or not, adds to that broader skepticism and makes genuine discounts less persuasive for everyone else.
That is the part of this story too easy to miss while watching two famous brands defend themselves in court. The legal risk is real and specific. But the erosion of trust in discount messaging generally is the bigger, slower cost, and it falls hardest on small sellers who cannot absorb a customer's skepticism the way a global brand can.
Sellers who build pricing on a documented, defensible history will not need to worry about either problem.
Source: Modern Retail, July 30, 2026