A proposed class action in California was filed against Shein, accusing the ultra-fast fashion company of misleading shoppers into making a purchase through “fake” discounts.
The lawsuit claimed that the e-commerce giant has been inflating the original prices for its products to create the impression of a significant discount, even though the items were rarely, if at all, charged at their original prices in the past 6 months. Shein did not respond to a request for comment as of posting.
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Plaintiff firm Milberg filed the case last May 5 at the Northern District of California. As of this post, the judge has not yet certified it as a class action, which federal law requires to meet certain standards, such as proving the scale and commonality of the harm.
For example, a plain color tank top on Shein was sold at $4.92 after a 43 percent discount on April 5, reflecting a significant markdown since the item was originally priced at $8.59.
However, the same product was consistently priced close to or even below $4.92 in the prior 6 months. It only sold at the full price of $8.59 once—and that is “to establish a misleading comparison,” the filing read.
“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,” it read.
The plaintiff argued that consumers would have never paid as much if it weren’t for the illusion of a discount. By doing this, Shein artificially drove demand.
“Reasonable consumers would not have paid the prices charged had they known that the products were rarely offered on the website at the reference prices, or that the products are routinely discounted,” the document read.
To make its arguments, the law firm used third party price trackers map out how Shein offered discounts over the course of 6 months. Extending the data set to 12 months prior led to the same conclusion. The problem, the plaintiff said, is not isolated: Shein has been “systematically” pricing its products this way.
This is not the first time Shein faced an accusation like this. In May 2025, the European Commission flagged Shein to respect EU consumer protection laws, citing “fake discounts” among other concerns.
