New York & Company 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 & Company, alleging that the women's clothing retailer's website deceives shoppers through fake, inflated reference prices designed to make ordinary prices look like steep bargains.

The complaint alleges that the New York & Company 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 were never genuine. The complaint contends they were artificially invented figures, placed beside the actual selling prices to create a false impression of significant savings.

Can a sale last forever?

What is known as 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 that buying now means getting a deal.

Federal guidelines and California law require that such reference prices reflect prices at which products were actually, or at least recently, offered for sale. If a retailer displays a reference price that was never genuinely charged, the practice can violate consumer protection law.

The complaint alleges that nearly every item on nyandcompany.com used this pricing format and that the displayed reference prices were artificial. As one example cited in the lawsuit, a pair of pants was listed 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, actually been offered for $78.

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The scope allegedly extended beyond individual products. To support the claim that the "sales" were not limited promotional events, the complaint cites archived records captured by the Wayback Machine, an internet tool that preserves historical screenshots of websites.

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

Do fake sales harm consumers?

Researchers who study purchasing behavior have found that 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. The complaint cites a body of research to support the argument that the New York & Company’s alleged pricing tactic meaningfully influenced consumers' buying decisions.

Paolone says she was among those consumers. 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 states that Paolone would not have made these purchases, or would not have paid the prices she did, had she known the reference prices shown on the site were fabricated.

What this means for customers

New York & Company has 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 captioned Rael v. RTW Retailwinds Inc. That settlement also involved allegations of false reference pricing on the same website. Customers in that case were able to claim a $7.50 voucher or 25% a purchase up to $100.

In 2023, a second class action filed in the same federal court, Metchell v. NY and Co Ecomm LLC, made essentially the same allegations about fake reference prices on nyandcompany.com, naming the operators of the site at that time as defendants. However, that case was voluntarily dismissed in August 2024.

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

It also 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, are also requested.

Finally, the complaint asks the court to issue injunctive relief, a binding court order directing the defendants to stop the alleged pricing practices on their website going forward. And of course, attorneys' fees and the costs of bringing the case are also sought.

The case, Paolone v. ADJHA NY&Co. LLC, et al., was filed in the U.S. District Court for the Central District of California.