After being accused of overpricing handbags in their outlet stores, Michael Kors settled the class action lawsuit by agreeing to pay $4.88 million.

The settlement began when the Michael Kors brand supposedly created “illusion” tags, attached to their exclusive outlet store handbags, that had a made-up “manufacturer’s suggested retail prices” (MSRP) so that the discounted price would look more profitable to the consumer than it actually was.


via Mom Closet

Shoppers caught on to the trick when they realized the bags had been made exclusively for the Michael Kors outlet stores and there was no intention of ever selling them elsewhere for the MSRP price listed.

On top of paying out the lawsuit, Michael Kors will replace the “MSRP” to “Value” on the price tags or even get rid of it entirely for the products exclusive to the outlets. Though, he did not confess to any wrongdoing by making these agreements.

The plaintiffs’ lawyer said in a court filing that this is only one out of the many retailers who advertise deceptive market prices at their outlet stores, violating the state consumer protection laws of New York.

The preliminary settlement that was filed as of Friday, June 12 follows shoppers who purchased Michael Kors outlet items in the last four years up until July 25, 2014.

As the plaintiffs’ lawyers seek to receive legal fees up to 30 percent of the settlement fund, it is awaiting approval from the Manhattan federal court which then will determine how much the Michael Kors fashion house really owes.


Image via Neinver