Costco class action lawsuit: Price markups for products sold online

Costco Online Class Action Lawsuit Overview:

• WHO: Plaintiff Annie Song, a Costco member, is suing the wholesaler.
• Why: Song claims the company falsely promises it will tell consumers whether items are cheaper in-store than online on its website.
• Where: Costco’s online class action lawsuit was filed in federal court in Washington.

A new class action lawsuit alleges that Costco lies to its customers when it claims to disclose whenever a product is more expensive on its website than in the store.

Plaintiff Annie Song filed the proposed class action lawsuit against Costco Wholesale Corp. on June 12 in federal court in Washington, alleging violations of state consumer protection laws.

Song, a Costco customer, claims the company misleadingly raises prices on products sold online at Costco.com and fails to disclose this to consumers. She says Costco “explicitly promises” consumers on its website that if a product is more expensive online than the same product sold in the store, it will disclose this.

“Despite its explicit assurances, Costco routinely omits this essential message and, in these cases, fails to tell consumers that they are paying more for a product sold on Costco.com than if they had purchased the exact same product in-store at their local Costco warehouse,” Song alleges.

Toilet paper cheaper in stores, class action lawsuit from Costco

Song says she ordered various personal items totaling $145.52 from Costco.com in January with two-day delivery.

She says none of the products she purchased in her order were indicated as potentially being available at a lower price at her Costco store. However, Song now believes several of the products she purchased on Costco.com for delivery were actually more expensive than if she had purchased the exact same items in the store.

For example, Song purchased 30 rolls of Charmin Ultra Soft toilet paper for $33.49. At no point during her transaction on Costco.com did Costco communicate that the toilet paper might be available at a cheaper price in the store, she says.

“However, the same package of Charmin Ultra Soft Toilet Tissue (30 rolls) that the plaintiff purchased online cost only $29.99 in the Costco warehouse,” she says.

According to the lawsuit, Costco is gaining an unfair advantage over its competitors

Song says she wouldn’t have made the online purchase if she knew she could buy the same toilet paper in the store for about $4 less than she paid online. She says Costco is failing to keep its promise to consumers by “fraudulently concealing” the online product markup.

“By concealing from consumers the truth about its online markup practices and the significant price differences between identical items sold online and in-store, Costco is deceiving consumers and gaining an unfair advantage over competitors who disclose their true pricing online,” Song said.

That’s why she wants to represent anyone who made a purchase with delivery through the Costco app or website and paid more for a product than Costco charged for the same product in the store, even though there was no notice on the online product page alerting the consumer that the item might be available for a lower price in the store.

Song is suing for violations of state consumer protection laws and is seeking class action certification, damages, fees, costs and a jury trial.

Meanwhile, Costco last week issued a recall for a pair of Tillamook cheeses after gray and black plastic pieces were discovered in a limited quantity of the products.

What do you think about the allegations against Costco? Let us know in the comments!

The plaintiff and the proposed class are represented by Kim D. Stephens and Cecily C. Jordan of Tousley Brain Stephens PLLC and Sophia G. Gold and Jeffrey D. Kaliel of KalielGold PLLC.

The Class action lawsuit over price increase at Costco Is Annie Song v. Costco Wholesale Corp.Case 2:24-cv-00845 in the U.S. District Court for the Western District of Washington.

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