Nike and Lululemon face lawsuits over alleged 'phantom discount' pricing

Nike and Lululemon are among the latest retailers targeted by lawsuits alleging deceptive pricing practices known as "phantom discounts." The suits claim the companies display inflated "regular" prices alongside lower sale prices, misleading consumers into believing they are receiving a greater discount than is actually offered.

Last week, a California woman named Annette Cody filed a lawsuit against Lululemon in Los Angeles Superior Court. Cody alleges that the company uses "fictitious regular prices" and corresponding "phantom discounts" to make sale items seem more attractive. She claims that in April, she purchased a pair of Wunder Train high-rise tights listed at $59 with a strikethrough price of $98, implying a $39 discount. However, Cody contends those tights had not been sold on Lululemon's website for the full $98 price since October 2025.

Lululemon's case comes just days after Nike was hit with a similar lawsuit earlier this month. The filing against Nike alleges that the brand implements false strikethrough prices that deceive customers into thinking they are getting a deeper discount than they actually are.

Legal and marketing experts note that such advertising practices have existed for decades, but recent enforcement actions and consumer lawsuits signal a growing crackdown on phantom discounts across the retail industry. The outcomes of these cases could have significant implications for how retailers price and market their products going forward.