Costco sued over advertising practices
People love to shop at Costco (PRICE) – Get a free report. The membership-based warehouse club dominated the American Customer Satisfaction Index’s annual retail survey.
The retail giant has topped the survey for six consecutive years with a score of 81 on a 100-point scale, ahead of its top rival Target. (TGT) – Get a free report and from Walmart (WMT) – Get a free report Sam’s Club, both scored 78 while Walmart landed at bottom of the survey with 71.
Keeping customers happy is essentially Costco’s business. Membership sales and membership growth and retention rates are the two most important company metrics.
In recent years, the warehouse club has done well with both. Its renewal rates in the United States and Canada have grown to over 90%, and its membership growth has remained steady. Renewing members and providing a stream of positive word of mouth (to attract new members) is at the core of the business model.
The company has generally done well in those areas, but a new class-action lawsuit shows that some members of the company are unhappy with the way Costco is performing.
Costco sued for advertising
A class action lawsuit lawsuit was filed against the warehouse club in California. The lawsuit revolves around claims Costco has made about its domestic tuna brand.
Costco falsely and fraudulently advertised and labeled its tuna products, including
Kirkland Signature White Albacore Tuna in Water, is “SAFE WITH DOLPHIN” (“Product(s”)).
Costco’s false advertising scheme misleads millions of consumers into believing that Products are “DOLL SAFE”, meaning they are produced using fishing methods that do not kill or harm dolphins. . However, the harsh reality is that Products are sourced using fishing methods that seriously injure and kill thousands of dolphins and other marine life each year. Costco knowingly and intentionally labels and advertises its Products as “DOLPHIN SAFE,” in order to increase profits at the expense of sustainability in relation to consumers and innocent marine life, while achieving unfair economic advantage over legal-compliant competitors selling tuna “DOLPHIN SAFE” True Cosmetics.
Both the box and packaging of Kirkland tuna are labeled “dolphin-safe”. The lawsuit claims Costco’s claims about its tuna “are false, misleading, deceptive, unfair, deceptive, and unlawful under its Consumer Legal Remedies Act.” California (CLRA).”
This lawsuit is a nationwide class action that any affected customer can participate in.
Costco Lawsuit Based on Definition of “Dolphin Safe”
Essentially, the lawsuit revolves around the idea that Costco knowingly benefits from calling its tuna “dolphin-safe,” while not actually making that claim.
“In recent years, consumers have become increasingly concerned with protecting the environment, including dolphins, through individual actions, such as the purchase of ‘Dolphin Safe’ tuna products, which are Made from tuna harvested with a fishing method that does not kill or injure dolphins. . As a result, ‘Dolphin-Safe’ tuna products, such as those in this case, are rapidly growing. rapidly gaining popularity due to their positive ecological benefits,” the lawsuit claims.
Overall, this is a lawsuit challenging what really constitutes “dolphin-safe” fishing. That’s a question not unique to Costco because in 2019, Chicken of the Sea, Bumble Bee Foods also faced a class-action lawsuit against companies that used the “Dolphin Safe” label. internal fish report.
That case is still pending. A federal judge announced on January 17 that the case against Costco could go ahead.