Recently filed complaints seemingly forecast a new type of class action in California courts: consumer protection claims based on allegations that merchants are overcharging consumers for shipping and delivery charges. Such claims have the potential to affect all companies selling consumer goods online or by mail order.
Even though there is no specific statute forbidding merchants from charging delivery fees that exceed the actual costs of shipping, the new complaints assert that the practice violates California Unfair Competition Law and Consumer Legal Remedy Act, based on ethical guidelines promulgated by the Direct Marketing Association, which state that “shipping or handling charges, if any, should bear a reasonable relationship to the actual costs incurred.”
As we saw over a number of years with Song-Beverly Act litigation addressing collection of ZIP codes and other personal information in connection with credit card transactions, it is likely that retailers will face increased exposure and uncertainty over these new claims for the foreseeable future.
Click here for an in-depth examination on the basis of the legal claims asserted and an identification of the issues that are likely to be pivotal as these cases proceed.
