A new class action lawsuit has placed Avenue, operated by FullBeauty Brands Inc., under the spotlight, after allegations of illegal phantom markdowns and deceptive pricing hit the retailer in California state court on July 22, 2025.
The Lawsuit’s Core Allegations
On July 22, 2025, plaintiff Annette Cody filed Cody v. FullBeauty Brands Inc., Case No. 5:25-cv-01334-KK-SHK in the Superior Court for the State of California, County of Riverside. Cody alleges that FullBeauty Brands manipulated discount displays on Avenue.com by using “fake discounts” and inflating reference prices, when it is not, resulting in a sham price disparity that is illegal under California law.
A case in point: Cody bought a V Cut Out Top for $9.98—allegedly discounted from a “strike-through” reference price of $59.95. Cody claims the reference price was not the “prevailing market price” within the previous 90 days, nor did Avenue.com disclose when it was relevant.
Monitoring the Price Scheme
Her attorneys, Scott J. Ferrell and Victoria C. Knowles of Pacific Trial Attorneys APC, monitored Avenue.com and “confirmed that the product was not offered for sale at the reference price during the relevant period”. The complaint asserts that Avenue.com is aware that the prices for its products are fake and artificially inflated, and intentionally uses them in a deceptive pricing scheme to increase sales and profits by misleading consumers into believing they are buying products at a substantial discount.
The Law: California’s Consumer Protections
This litigation draws on California’s False Advertising Law and Unfair Competition Law, which require reference or former prices to reflect the true market price for at least three months before the sale. Violations risk state and federal penalties.
Other brands, such as Ann Taylor, Ralph Lauren, Michael Kors, and Akira, have faced similar suits and had to change their pricing strategies or settle for millions. The recent wave of lawsuits in California, Oregon, New York, and across the U.S. demonstrates a move for industry-wide reform.
Consumer Harm and Retail Profit
Plaintiffs like Cody argue, “This practice artificially inflates the true market price for these products by raising consumers’ internal reference price and in turn the perceived value consumers ascribe to these products”. Bogus discounts convince buyers to pay more, leading them to believe they are receiving a genuine bargain—when, in reality, the reference price may be entirely fabricated.
Cody’s complaint seeks damages, restitution, and a permanent injunction. She requests future protection for herself and other consumers, asserting that she has no adequate remedy at law and would purchase products from Avenue.com again if she could trust that the company’s regular prices accurately reflected former prices and the market value of the products.
National Context and Impact
This is only the latest in a series of class actions targeting deceptive markdowns. Retailers like Amazon, Hobby Lobby, and Ann Taylor have faced similar accusations, with some settling for sums exceeding $6 million, and others agreeing to modify discount labeling and online pricing protocols.
Attorneys have argued fake discount scheme is intended to (and does) increase [company] sales while depriving consumers of the benefit of their bargain. The push for legal and regulatory reform is intensifying, as more shoppers become aware of phantom markdown schemes.
Community Response and Legal Resources
As Cody v. FullBeauty Brands Inc. unfolds in California state court in 2025, its outcome is poised to reset expectations for honest discount advertising—potentially changing how fashion and e-commerce brands display their markdowns for years to come.
