The Plaintiffs in a national class action suit alleged that the Defendant, an online retailer, advertised artificially low prices to attract consumers to its website and then added a misleading, oversized line-item fee during the checkout process that substantially increased the final purchase price beyond what consumers anticipated based on the advertised price. The Plaintiffs alleged false advertising and deceptive business practices.
Keegan & Donato was retained by the Defendant to design and execute a consumer perception study to determine how relevant consumers actually understand the Defendant’s checkout-page pricing representations, including the contested fee disclosure, and whether those representations were likely to deceive or confuse consumers. The study consisted of hundreds of relevant consumers—i.e., likely purchasers within the Defendant’s product category, including past customers—who completed a simulated online purchase using a replica of the Defendant’s actual checkout flow, including the order summary page containing the disputed pricing and fee information.
The study findings weighed against a finding of consumer deception or confusion. Nearly one-third of respondents indicated they would cancel or abandon the simulated transaction after encountering the contested pricing information, and a large majority of these respondents cited reasons directly related to the contested issues—i.e., price and the disputed fee—when asked to explain their decision in their own words. Among respondents who proceeded with the simulated purchase, a strong majority correctly identified the total amount they would be charged, and no respondent mistook a subtotal that excluded the disputed fee for the actual purchase price. When asked to rank the attributes that matter most when making purchases in this product category, total price inclusive of all fees and taxes ranked as the single most important consideration to respondents.
Because the study replicated the Defendant’s actual purchase experience and isolated consumer comprehension of the contested pricing representations through both closed- and open-ended measures, the results provided direct evidence that relevant consumers were able to accurately process and understand the contested disclosures, thus undermining the claim that the Defendant’s pricing practices were likely to deceive or confuse consumers.