New York & Co. class action alleges website uses fake sale prices

Los Angeles County resident Marisa Paolone filed a class action lawsuit on March 24, 2026, against the operators of New York & Co., alleging the women's clothing retailer's website deceives shoppers through fake, inflated reference prices designed to make ordinary prices look like bargains.

The complaint alleges New York & Co. runs what amounts to a perpetual sale where nearly every product on the website carries a crossed-out reference price alongside a lower sale price.

According to Paolone, those crossed-out prices are not genuine. She contends the company artificially inflates figures and places them beside the actual selling prices to create a false impression of significant savings.

What are reference prices?

Reference pricing, sometimes called strikethrough pricing, is when a retailer displays a product's supposed original price next to a discounted sale price. The visual contrast is meant to signal value, suggesting the item once cost more and buying now means getting a deal.

Federal guidelines and California law require retailers to base reference prices on amounts at which they actually, or recently, offered products for sale. A retailer may violate consumer protection law if it displays a reference price it never genuinely charged.

The complaint alleges that nearly every item on nyandcompany.com listed artificial prices. In one example cited in the lawsuit, New York and Co. listed a pair of pants with a reference price of $78 crossed out next to a sale price of $15.99. The complaint alleges those pants had never, or almost never, cost $78.

[INSERT IMAGE FROM EXHIBIT A]

The complaint cites archived records captured by the Wayback Machine, an internet tool that preserves historical website screenshots, to support its claim that New York $ Co. did not limit its “sales” to promotional events.

Those records show the website consistently advertised 40% to 50% off across virtually all of its products dating as far back as Jan. 12, 2023., according to the lawsuit. The complaint argues this pattern reveals the sale price as a permanent feature of the site's pricing structure rather than a temporary markdown.

Shoppers rely on reference prices to make purchase decisions, research shows

Researchers who study purchasing behavior found shoppers who see a higher crossed-out price next to a lower sale price are more likely to view the product as a strong value, more likely to complete a purchase and less likely to compare prices elsewhere.

Paolone says she made three purchases on the website between March and May 2023, each time relying on the discounts shown against the displayed reference prices.

The complaint claims Paolone would not have made these purchases, or would not have paid the prices she did, had she known New York and Co. fabricated the site's reference prices.

What this means for customers

New York & Co. faced similar litigation in recent years.

The first came in 2019 when the the company's predecessors settled a class action in San Diego Superior Court titled Rael v. RTW Retailwinds Inc. That settlement involved allegations of false reference pricing on the same website. Customers in that case could claim a $7.50 voucher or 25% off a purchase up to $100.

In 2023, a second class action filed in the same federal court, Metchell v. NY and Co Ecomm LLC, also alleged New York & Co. used fake reference prices on nyandcompany.com, naming the operators of the site at that time as defendants. However, the court voluntarily dismissed the case in August 2024.

The current lawsuit asks the court to order restitution, which would require the defendants to return money to affected class members. It also seeks disgorgement of profits, a remedy that would strip the defendants of any revenue generated through the allegations and redirect those funds to consumers.

Additionally, the lawsuit seeks compensatory damages, meant to cover actual financial harm to class members, and punitive damages, intended to punish defendants for conduct deemed especially willful or harmful.

Finally, the complaint asks the court to issue injunctive relief, a binding court order directing the defendants to stop the alleged pricing practices going forward.

Class counsel filed the lawsuit, Paolone v. ADJHA NY&Co. LLC, et al., in the U.S. District Court for the Central District of California.