Higher operating costs have forced a company famous for 99 cent deals to raise their prices. But with a name like 99 Cents Only, how do you do that? Charge 99.99 cents it turns out.
But the fractional cent increase has some customers upset and now the company is facing two class-action lawsuits that claim unfair and deceptive business practices and deceptive advertising.
"If they call themselves 99 Cents Only, it should be 99 cents," Dan Callahan, an Orange County lawyer, told the LA Times.
Callahan said in surveys, most customers didn't realize they were paying more than 99 cents. The lawsuits are asking the chain to be more clear in their advertising and are seeking unspecified monetary compensation, according to the Times.
99 Cents Only chief executive Eric Shiffer told the Times he didn't believe there was any wrongdoing and insists the company made ever effort to tell consumers about the change…or lack of it:
"We changed all the signs, we have a large poster in the window of every store explaining the increase, we put it in our ads in the newspaper, we put it on the radio," he said. "Never mind the fact that the price increase was a very tiny amount, as we all know. So I don't think consumers were misled."
Industry experts say as long as the company offers better prices than the competition, then the issue may not matter to consumers.
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"As long as they offer the best value in the marketplace, then who cares?" Joan Storms, an analyst at Wedbush Morgan Securities, told the Times.
The company estimates the fractional price increase may bring in as much as $12 million.
