Black Friday 2026: US reference-price lawsuits catching retailers
Every Black Friday for the past decade, class-action lawyers file a fresh wave of complaints against US retailers for deceptive reference pricing. The playbook is familiar: a plaintiff buys a product advertised as 'Was $199, Now $79 — 60% off,' obtains through discovery the retailer's SKU-level pricing history, and demonstrates that the product was never actually sold at $199 in any meaningful period, or that the $199 price was set briefly ahead of the Black Friday markdown specifically to create the appearance of discount. Under California Business and Professions Code §17501 and its counterparts in other states, plus the FTC's Guides Against Deceptive Pricing (16 CFR Part 233), fictitious reference prices are actionable — and the case law has hardened around the point that 'former price' means a price the retailer actually maintained for a reasonable prior period, not a number the retailer wrote down once. This post walks through the pattern: what §17501 actually requires, what the FTC's parallel federal framework adds, three anonymised composite lawsuit types that recur across the reported cases (JCPenney, Macy's, Kohl's, Michael Kors, Zappos, Ross, and dozens of others have all faced similar theories), what merchant defenses courts have accepted versus those they have rejected, and what a 2026 seller can put in place before Black Friday advertising goes live. The framing is practical rather than academic — the goal is that a merchant reading this by mid-November can adjust pricing displays, documentation practices, and marketing copy in time for the campaign, and avoid becoming the next named defendant in a Central District of California class complaint filed the second week of December.
California §17501, FTC 16 CFR 233, and a decade of class actions on Black Friday pricing. What US sellers need to defend in 2026.
- What §17501 actually says and why the plaintiffs' bar loves it
- Composite case type one — the never-real MSRP
- Composite case type two — the pre-sale price bump
- Composite case type three — the SKU-level bait-and-switch
- Defenses that work versus defenses that don't
- The practical 2026 Black Friday compliance checklist
What §17501 actually says and why the plaintiffs' bar loves it
California Business and Professions Code §17501 provides that no price shall be advertised as a former price of any advertised thing unless the alleged former price was the prevailing market price within three months next immediately preceding the publication of the advertisement, or unless the date when the alleged former price did prevail is clearly, exactly, and conspicuously stated in the advertisement. The statute's language is worth reading carefully because plaintiffs' lawyers have built a substantial body of case law on its details. Three elements matter for our purposes. First, the reference price must have been 'the prevailing market price' — meaning not merely offered but actually the price that dominated actual sales, in the advertiser's practice or in the broader market. Second, the reference window is three months preceding the advertisement — not the past year, not two years ago, and not some undefined 'MSRP' set by the manufacturer that the retailer never actually charged. Third, if the reference price was earlier than three months ago, the advertisement must clearly state when that price prevailed — a workaround rarely used in practice because it undermines the discount narrative. California's statute is not unique — every state has some version of a deceptive-pricing prohibition, and the FTC's Guides Against Deceptive Pricing at 16 CFR Part 233 provide the federal template. But §17501's specificity, combined with California's plaintiff-friendly class-action environment and the concentration of e-commerce fulfilment in California (which supports personal jurisdiction over out-of-state retailers), makes California the venue of choice for reference-pricing plaintiffs. A retailer with any nexus to California — including through shipping products to California customers via Amazon FBA warehouses in the state — is realistically within reach. The plaintiffs' bar has invested substantially in SKU-level price-history acquisition tools that make it economical to identify reference-pricing violations at scale. What was once a case-by-case investigation is now a screening operation across thousands of SKUs, with cases filed against retailers whose price-history patterns match the deceptive-pricing signature.
Composite case type one — the never-real MSRP
The first recurring lawsuit pattern targets retailers who advertise 'Was $X, Now $Y' where $X is a Manufacturer's Suggested Retail Price (MSRP) that the retailer itself has never actually charged, and the manufacturer may not have effectively enforced across the market. A plaintiff's complaint typically alleges: (a) the product was advertised at $199 'was' price with a $79 sale price; (b) the retailer's own pricing history shows the product has been sold at $79 or $89 for the entirety of the past six months; (c) the $199 'was' price appears in advertising but never in actual transactions; (d) the retailer's justification would be that $199 is the MSRP set by the manufacturer, which is technically true but does not satisfy §17501's requirement that the reference price be prevailing in the advertiser's practice. Courts have generally been unsympathetic to the MSRP defense when the retailer never actually charged the MSRP and the MSRP does not reflect prevailing market prices. Judge Fischer's opinion in Chowning v. Kohl's Department Stores (Central District of California, 2015-2016) is often cited on this point: an MSRP that was never actually charged, and that the manufacturer's own market presence does not sustain, cannot serve as a defensible former price under §17501. Class certification has followed in similar cases. Settlements have run into millions of dollars, plus attorney's fee awards. The defense pattern that has occasionally worked is showing that the MSRP was in fact charged by the retailer during a meaningful period (a legitimate 'was' price with a documented sales record) — but that requires actual sales at the reference price, not just its presence on price tags or in the internal system.
Composite case type two — the pre-sale price bump
The second recurring pattern is more sophisticated and, arguably, more clearly deceptive. A retailer runs a Black Friday campaign advertising 'Was $150, Now $75 — 50% off.' Discovery reveals: the product had been sold at $75 for most of the year; approximately two weeks before Black Friday, the retailer raised the list price to $150; the $150 price appeared briefly during those two weeks with essentially no sales at that price; Black Friday launched with the '50% off from $150' advertising; after Black Friday, the price returned to $75. This pattern — sometimes called 'price gaming' or 'reference-price manipulation' — has been extensively litigated. Plaintiffs argue, and courts have generally accepted, that a two-week window of $150 does not constitute 'prevailing market price within three months' when the product's overall pricing history shows $75 as the actual prevailing price. The pattern is often visible in retailer's own SKU-level price-history exports and third-party price-tracking services (CamelCamelCamel for Amazon, Keepa, Honey's historical price data). Class certifications have followed in cases with clear factual patterns. The merchant defense that occasionally works is when the pre-sale price bump reflects a genuine strategic pricing decision — for example, testing a higher price point in a limited-time window with actual sales at that price, then following with a targeted promotion. But the internal documentation must support the strategic story, and the sales record must show that customers did buy at the higher price during the reference window. Post-hoc rationalization typically does not survive discovery.
Composite case type three — the SKU-level bait-and-switch
The third pattern involves retailers that use closely-related SKUs to create the appearance of a reference-price basis. A plaintiff's complaint might allege: (a) the retailer advertises 'Was $199, Now $89' for a particular SKU during Black Friday; (b) that specific SKU has never been sold at $199; (c) a related SKU (same product line, different color or size) was sold at $199 briefly at some point; (d) the retailer treats the two SKUs as interchangeable for reference-price purposes, but consumers view them as distinct products. Case law has been mixed on this pattern — some courts have found that reference prices must attach to the specific SKU advertised, others have accepted broader product-line reference-pricing under specific factual circumstances. The trend, however, is toward SKU-specific reference-price requirements, particularly where consumers would reasonably distinguish between SKUs based on color, size, or feature configuration. The Central District of California has issued several opinions on this point in the past five years. Retailers with large SKU counts (fashion, electronics, home goods) face particular exposure because SKU-level reference-pricing discipline is harder to maintain at scale than at boutique-retailer scale. Retailers that source products from multiple manufacturers with varying MSRPs, and that discount to promotional pricing on a rolling basis, sometimes lose track of which SKUs have supporting reference-price documentation and which don't. A rigorous internal control is to require that every advertised 'was' price be validated against SKU-level sales history within the three-month window before the advertising copy is approved.
Defenses that work versus defenses that don't
Reviewing the reported opinions and settled cases across the past decade produces a clear picture of what works. Defenses that courts have accepted include: (a) actual documented sales at the reference price during the three-month window, in reasonable volume — not necessarily majority but not de minimis either; (b) reference prices that are conspicuous, dated, and clearly labeled as historical (e.g., 'Original list price $199, sold at that price January 2025-April 2025' with the product's actual history matching); (c) advertising that avoids reference-pricing structure altogether, presenting only the current price with descriptive value framing ('Cotton twill jacket $79 — free shipping'); (d) reference prices tied to third-party benchmark pricing (MSRP that the manufacturer actually enforces across a substantial share of the market, with retailer-level documentation of the enforcement) — though this has been a difficult defense to sustain. Defenses that courts have generally rejected include: (a) 'the price tag showed $199' when the actual sales record shows no meaningful sales at $199; (b) 'the manufacturer sets the MSRP' when the retailer never charged the MSRP; (c) 'we ran a two-week price test' when the two-week window generated no sales at the tested price; (d) 'the average discount for this product category is 50%' — sector-average arguments don't satisfy §17501's specific-price requirements; (e) 'plaintiffs are lawyers looking for settlements' — courts have been unmoved by this rhetoric where the underlying pricing violations are documented. The pattern the plaintiff's bar rewards is retailers whose advertising discipline is weaker than their internal pricing operations — companies that write bold discount claims in marketing without checking against the SKU-level pricing history that discovery will expose. Companies whose marketing and pricing operations are tightly integrated, with automated validation of reference-price claims against actual sales history, are targeted less often and defend more successfully.
The practical 2026 Black Friday compliance checklist
A checklist that operates as internal control during the two weeks before Black Friday launch, applied to every SKU included in advertised promotional pricing. Item one: for every 'was' or 'compare-at' or 'was $X' price to be displayed, verify that the SKU has actually been sold at that price for meaningful volume during at least a substantial portion of the past three months (past 90 days is the safe reading of §17501). Extract the SKU-level sales history from Shopify, Amazon Seller Central, retail POS system, or comparable source; require documented evidence in the campaign approval package. Item two: reference prices that cannot be validated should either be dropped from the advertising or replaced with a dated historical reference format ('Original price $199 — sold Jan-Mar 2025'). Item three: any pre-Black Friday price adjustments (raising prices in the weeks leading up to establish a reference-price basis) should be documented with genuine strategic reasoning, not post-hoc, and should generate actual sales at the higher price. If the price bump generates no sales, the internal record shows the reference price was never prevailing and the advertisement will fail §17501 review. Item four: SKU-level discipline — reference prices attach to the specific SKU advertised, not to a broader product line. Automated tooling that validates SKU-level reference-price claims against SKU-level sales history is worth the engineering investment for large SKU counts. Item five: California nexus review — sellers shipping to California customers, using Amazon FBA warehouses in California, or otherwise reaching California consumers, are within reach of §17501 class actions. Reference-price advertising that would fail §17501 in California typically also fails FTC review and other state deceptive-pricing statutes; California is not an outlier. Item six: consumer-facing marketing content review by legal counsel or a compliance-trained internal reviewer, with the SKU-level pricing evidence package attached to the campaign approval. This adds friction to Black Friday marketing production but reduces post-campaign litigation exposure. Item seven: post-campaign documentation retention — the SKU-level pricing evidence should be preserved for the statute of limitations period (four years in California for §17501, longer for related fraud claims), because plaintiffs may file class actions in January or February after Black Friday and discovery will demand contemporaneous records.
Sources
Data + numbers referenced in this article are sourced from these public documents: