Boohoo owes its customers money to the tune of $197 million for promoting fake sales.
The fast fashion giant settled a class-action lawsuit in April that was first filed in 2020. Per the complaint, the retailer would promote fake deals to drive sales. The site would advertise clothing for a discounted price when in actuality, the item was never the higher cost to begin with. For example, the company may claim a dress was originally $40 but is on sale for $15. The dress never cost $40, but Boohoo would share this deal just to give the illusion that customers were getting a good deal. This practice is against consumer protection laws in California.
Boohoo agreed to the settlement but would not admit any liability in the case. The site even asked a judge to dismiss it altogether, citing that customers received the goods they ordered. However, the court sided with the buyers, all of whom claimed they would not have ordered the goods had they known they weren’t actually receiving a discount.
To pay off their massive debt to customers, Boohoo will soon begin sending out 11.3 million gift cards to victimized customers. However, the number of cards is certainly not enough to go on a shopping spree. All qualifying shoppers will receive a total of $17.28, $10 for their purchase, and $7.28 to cover shipping costs. Boohoo is not the only site being held responsible in the suit. Parent company Boohoo Group also owns BoohooMAN, Nasty Gal, and Pretty Little Thing, all of which were also accused of similar practices. Ironically, in September 2022, the collective reached a separate $5.9 million lawsuit for an identical situation.