Attorney General's News Release

June 25, 1996

Levitz Furniture reaches agreement with Nixon to pay state $200,000 to resolve allegations of phony price comparisons

Jefferson City, Mo. — One of the largest furniture retailers in the country has agreed to pay $202,500 to the state of Missouri to settle allegations that it misled consumers with phony claims of price savings on its merchandise, Attorney General Jay Nixon said today.

Missouri was the lead state in an eight-state investigation of Levitz Furniture Corp. of Boca Raton, Fla. The company has four stores in Missouri, located in St. Charles, Hazelwood, Independence and North Kansas City.

“You can't just pull 'regular' prices out of the air when you mark or advertise items on sale,” Nixon said. “It is misleading and deceptive to consumers, who should be able to make reasonable price comparisons when shopping. This agreement will require Levitz to stop comparing 'sale' prices to 'regular' prices that never really existed.”

The proposed consent decree, filed today in Jackson County Circuit Court, would order the retail chain not to use fictitious price comparisons in selling or advertising its furniture. Nixon accuses Levitz of misrepresenting the “regular” and “sale” prices of its furniture.

Under the terms of the agreement:

• Levitz may not quote a “regular price” unless Levitz offered the item at or above that price, in good faith, for more than 60 percent of the time that the item was offered during the past 12 months. An offering price is presumed not to have been offered in good faith unless, during the past 12 months, Levitz made at least 20 percent of its sales of the item at or above that price.
• Levitz may not claim that items are on sale unless Levitz is offering a meaningful reduction from its own regular prices.
• Levitz may not falsely suggest that, to take advantage of a price, consumers must act within a specified period of time.
• Levitz must disclose a beginning and ending date whenever it advertises a sale.

Levitz agreed to pay a total of $1.12 million to settle with all eight states; the other participating states were Arizona, California, Connecticut, Maryland, Pennsylvania, Texas and Washington. The consent decree will not become final in Missouri until approved by the Jackson County Circuit Court.

Since Aug. 30, 1976, Levitz has been subject to a Federal Trade Commission administrative order requiring the company to cease and desist from representing that “a reduced sale price is applicable to certain goods, unless such representation is true.”

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818