Jury to Decide If Hobby Lobby’s Coupons and Pricing Are Deceptive and Misleading

When items for sale at Hobby Lobby have a “marked price”, an “always price” and a “regular price”, and you use a coupon that’s not valid on sale prices – how in the world can you be sure what price you’re actually going to pay when you check out?

A federal judge says it should be up to a jury to decide.

More than two years after two Alabama shoppers sued Hobby Lobby over its confusing pricing and couponing policies, the judge in the case has issued a key ruling. He’s allowing the case to go forward, in part, recommending that a jury determine whether the craft store chain’s policies are misleading and in violation of the state’s Deceptive Trade Practices Act.

And a jury’s decision could have an impact on at least two other pending lawsuits, and could affect millions of shoppers who may feel Hobby Lobby owes them bigger discounts than they’ve actually been getting.

The Alabama case has a somewhat complicated history. Diane Browning and David Phillips of suburban Birmingham filed the lawsuit in May of 2016, after each went shopping at a local Hobby Lobby store, using one of the retailer’s regular weekly coupons that offer 40% off “one item at regular price”. They each bought an item that was marked as being “always 30% off”. Since each item was “always” 30% off, they reasoned, that must have meant the selling price was the “regular price”, since that’s the price at which it was “always” sold.

So they were surprised to find that Hobby Lobby took 40% off the supposed “regular” price of their items and not off the “always” price.

“Coupon discounts are taken from a price the item never sells at,” their lawsuit argued. Hobby Lobby’s “regular” prices are “an artificially inflated price” that effectively turns a 40% off coupon into a mere 10% off coupon after the “always 30% off price” is factored into the discount. They called the whole thing a “false and deceptive scheme” that Hobby Lobby uses for the purpose of “attracting customers to its stores with the promise of discounts that did not ever exist”.

The plaintiffs sought class-action status for their case, on behalf of all other customers who may have been similarly deceived – which means all Hobby Lobby couponers could be eligible for a share of any settlement.

Over time, though, Phillips dropped out of the case. Two other plaintiffs joined in, then one dropped out. And Mrs. Browning, unfortunately, passed away.

Now, her estate is continuing the battle on her behalf. And the judge has allowed her case to go forward, while dismissing the claims of her remaining co-plaintiff.

Plaintiff Mary Carrara’s case was tossed out because she purchased fabric with a 40% off coupon. And the judge determined that the “fabric ticket” she was given to bring to the register clearly stated she was being charged a discounted price, and explained how coupons were to be applied. “I feel deceived sometimes that I don’t get the 40% off when I buy a fabric that says ‘always 30% off’,” Carrara said in her deposition. But the judge determined she was more disappointed than deceived, noting that she conceded “she will not be deceived in the future, because she is presently aware of Hobby Lobby’s practices concerning the application of its 40% off coupon.”

As for Browning’s case, the judge denied the estate’s breach of contract claim, denying that any implied contract existed. And he denied the estate’s request for an injunction forcing Hobby Lobby to immediately change its pricing and couponing practices, since Browning’s husband is unlikely to be deceived in the future, after testifying that “he has only been to Hobby Lobby once with his wife, never returned since the lawsuit was filed, and never intends to return.”

That leaves the question of whether Browning herself was deceived by Hobby Lobby’s coupon. “The court is not persuaded that the coupon’s statement that it is not valid with any other ‘discount’ somehow clarifies the coupon’s application,” the judge wrote in his decision. “A question of fact exists as to whether… ‘Always 30% Off’ necessarily means it was a ‘discount’ or if it was the ‘regular’ price charged… The collective use of the ‘marked price,’ ‘always price’ and the ‘regular price’ necessarily creates confusion on the part of the consumer that a reasonable juror could conclude equates with a misleading statement of fact.”

That makes this issue “a question of fact for the jury to decide,” the judge determined.

Steven Marcrum, who lives just outside Pensacola, Florida, will be particularly interested in how this case turns out. He filed his own lawsuit against Hobby Lobby this past June, claiming that “Hobby Lobby offers percentage discount coupons and takes these percentage discount coupons from its artificially inflated rather than its everyday ‘regular’ prices. Hobby Lobby systemically refuses to give the advertised percentage discount coupon from the price at which the merchandise ‘always’ sells.”

Since his claims were very similar to Browning’s, his case was put on hold pending the outcome of Browning’s case. So good news for Browning’s estate, could prove to be good news for him as well.

And Christina Chase of California is also likely to be watching the Browning case closely. She filed suit last year, arguing that Hobby Lobby simply makes up its “regular prices”, so its “always discounted” prices don’t represent a real discount at all. “The result is a sham price disparity that misleads consumers into believing they are receiving a good deal,” her lawsuit read,

Her case was headed for mediation after a judge refused Hobby Lobby’s request to dismiss her claims. “It is plausible that a ‘reasonable consumer’ could have been misled by plaintiff’s advertising,” the judge found.

So what is Hobby Lobby’s take on all of this? It claims its “always 30% off” prices are obviously sale prices to which its coupons cannot be applied. It’s “emphatically clear to all who opened their eyes that the 30% off prices were discounts,” the retailer argues.

Now it looks like Hobby Lobby will have to make that argument to a jury. And depending on how the jury decides, deals at Hobby Lobby may never be the same – for better or for worse.