A proposed class action lawsuit filed in California accuses fast-fashion giant Shein of tricking shoppers with phony markdowns. The complaint, submitted by the law firm Milberg on May 5 in the Northern District of California, claims the company routinely inflates original prices to make discounts appear far steeper than they really are.
According to the filing, Shein listed a plain tank top at $8.59 but offered it for $4.92—a 43 percent discount. However, price tracker data shows the same top sold at or below $4.92 consistently over the prior six months. It only appeared at the full $8.59 once, which the lawsuit alleges was done “to establish a misleading comparison.”
“This deceptive practice has allowed Shein to reap billions of dollars in revenues from the U.S. alone, all at the expense of unsuspecting customers who believe Shein’s sales prices are genuine, discounted, bargain prices,” the document states.
The plaintiff argues that reasonable consumers would not have paid the listed prices if they knew the items were rarely offered at the reference price. The problem appears widespread: extending the tracking data to 12 months yielded the same pattern. The suit claims Shein has “systematically” priced its products this way.
A federal judge has not yet certified the case as a class action, which requires proving the scale and commonality of the harm. Shein did not respond to a request for comment. This is not the company’s first run-in over the issue. In May 2025, the European Commission warned Shein to comply with EU consumer protection laws, citing fake discounts among other concerns.
Originally reported by WWD