Ann Taylor and Loft are facing a proposed Class Action that accuses their parent company, Premium Brands Opco LLC, of using hidden processing and handling fees on their e commerce sites in violation of new junk fee and honest pricing laws in California and Virginia. The lawsuit argues that shoppers on AnnTaylor.com and Loft.com are ‘nickel and dimed’ through illegal drip pricing because the mandatory fees are only revealed at the very end of checkout, after consumers have invested significant time in the purchase journey.
How the alleged drip pricing works
Filed on February 26, 2026, in the Southern District of New York (Sun et al. v. Premium Brands Opco LLC, Case No. 1:26‑cv‑01614), the 27 page complaint claims the retailer fails to clearly and conspicuously disclose a required processing or handling fee in the advertised product price or early in the transaction flow. Instead, according to the filing, the sites display artificially low prices that exclude a bundled shipping and processing surcharge, which is then added at the final step before a customer places an order. The plaintiffs say this practice misleads consumers about the true cost of their purchases and constitutes drip pricing designed solely to increase Premium Brands Opco’s profits.
The suit emphasizes that the fee is both mandatory and unavoidable: there is, it alleges, no way to complete a purchase on AnnTaylor.com or Loft.com without paying it. The complaint describes how users must first sign in or create an account, then enter shipping, contact, and payment information, only to discover the extra charge on the final confirmation page.
“In other words, the total price is never disclosed before a user reaches the final step in the checkout process prior to placing an order,” the complaint states.
California and Virginia’s Honest Pricing Laws
The case relies heavily on recent legislative changes aimed at junk fees and hidden charges. In California, a 2024 amendment to the Consumers Legal Remedies Act, often referred to as the state’s Honest Pricing Law, requires that advertised prices include all mandatory fees and surcharges, other than government imposed taxes and shipping, where clearly separated. The complaint argues that by keeping the processing component out of the headline price and only bundling it with shipping at the end, Premium Brands Opco violates this law’s requirements for all in pricing.
Similarly, the plaintiffs invoke Virginia’s Mandatory Fee and Surcharge Disclosure Law, which took effect in July 2025 and forbids retailers from advertising prices that exclude compulsory fees. They contend that the processing or handling charge on Loft.com is not a genuine postage or carrier pass through, but a retailer imposed surcharge that must legally be included in the advertised price from the outset. According to the complaint, labeling it as shipping and processing or shipping and handling does not cure the omission when the underlying fee is essentially a revenue line for the company.
Who is Suing and What They Paid
The named plaintiffs are a California shopper and a Virginia shopper who say they were surprised by these fees on recent orders. The first plaintiff, a California resident, allegedly bought two items from Ann Taylor in December 2025 and was charged a mandatory bundled shipping and processing fee of $8.95. The second, a Virginia resident, claims she purchased multiple items from Loft in July 2025 and was charged a bundled shipping and handling fee of $16.95. Both plaintiffs say they would not have agreed to the transactions, or would have paid less, had the true total price been disclosed upfront.
On that basis, the lawsuit seeks to represent a nationwide class limited to consumers in California and Virginia who paid the challenged fees on Ann Taylor and/or Loft websites. The proposed main class would cover all such purchases in either state made during the two years before the action was filed, while two subclasses would focus specifically on transactions on or after July 1, 2024, in California and July 1, 2025, in Virginia, aligning with the effective dates of the respective honest pricing laws.
What the Lawsuit Wants and Why it Matters for Retail
The plaintiffs seek damages, restitution, and injunctive relief that would require Premium Brands Opco to include all mandatory fees in its advertised prices and to clearly disclose any remaining optional charges from the start of the transaction. They argue that anything less would allow the company to continue using artificially low headline prices to lure shoppers into carts that end up costing more than expected.
As more U.S. states adopt honest pricing and junk fee bans, this case shows how retail and fashion brands’ checkout flows, especially separate processing or handling fees, are increasingly being tested against those standards in court. The Ann Taylor/Loft suit is another reminder that drip pricing is no longer just a reputational risk; it is fast becoming a legal and regulatory flashpoint.
