Florida fashionista lawyer, Carolyn Kellman, is looking really good right about now. She returned a pair of shorts to a store called “Forever 21,” and received a refund that was one cent less than what she paid. From the Daily Business Review :
Carolyn Kellman, whose fashion sense was profiled in the Miami Herald in 2007, paid $14.46 for the shorts at the Forever 21 store in the Dolphin Mall on May 12, the complaint filed by Kevin Love of Criden & Love in South Miami said.
Kellman, an attorney with the Strickland Law Firm in Coral Gables, returned the shorts to the Forever 21 in the Shops@Sunset Place on May 30 but was credited $14.45, “or exactly $0.01 less,” the complaint said.
On June 27, Kellman was charged $11.57 for a skirt, also black, at the Sunset Place store. She returned it July 13 and was credited $11.56, according to the complaint, which attaches copies of her receipts and alleges breach of contract, unfair and deceptive practices, and unjust enrichment.
How many people would think “class action” over a penny? But then, take a penny from every person who returns a garment and, 1.500001 million returns later, you’re talking upper court threshold, baby. Seriously, Kellman alleges this is a penny-skimming scheme, the theory being that the amount being glommed is too small for anyone to take any real action. If a customer complains, give them back their penny, but the expectation is that it’s not even worth the time of a phone call, and few people are going to demand the return of their cent. Mind you, the same theory holds when the amount is a dollar, except companies that sneak an extra dollar in their billings are doing 100 times better than Forever 21.
While many will snicker at a case like this being brought as a class action, this is what I consider one of the best uses of class actions available. This falls precisely into the realm, where a business is taking money, some might call it stealing, to which it’s not entitled, but in amounts too small for anyone to fight over. It’s still wrong, indeed very wrong because of how calculated it is, and yet escapes redress.
The irony in a case like this is that, as is invariably the complaint about class actions, the lawyers make out like bandits while the class gets a couple pennies. In this case, that might be full compensation, but the unseemly aspect of the lawyers getting millions is always troubling. This is why guys like Ted Franks keep an eye on such shenanigans.
And it appears quite likely that this case may produce substantial legal fees for the lawyer representing the class despite there being extremely limited recovery for the class itself. Indeed, this may end up with the company promising to stop glomming pennies and nothing more. Yet, the lawyers will get paid, with the zeroes being on the other side of the decimal point.
But how else are companies to steal small to be stopped? Certainly, no one would argue that it’s acceptable for companies to withhold money when they shouldn’t, but which one of us would want to spend 1000 hours prosecuting a case over a penny? Indeed, it would never happen, since they would just flip you a dime and tell you to keep the change. And then continue skimming pennies from everyone else.
The Herald photographed [Kellman] wearing Christian Louboutin shoes, a Panerai watch, Sacri Tabu bracelet and gold beads from Studio LX South Miami, a vintage ivory pendant on a black suede cord by Shelly Litvak and diamond stud earrings. She was holding a Balenciaga motorcycle weekender bag.
Nonetheless, I admire this lawyer’s tenacity and the fact that was sufficiently pissed off to do something over a penny. You go, girl.
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As tort reformers are fond of saying, “Corporations are people.”
If I, you, or anyone else skimmed pennies from Forever 21, we’d be prosecuted for embezzlement.
So I would contend that this case is not appropriate for class action treatment.
It belongs in the criminal courts.
I’ll hold my breath waiting for that to happen.
Hey Mike. Long time. Good to hear from you.
Well, the law suit has apparently accomplished something – these days, Forever 21 doesn’t give cash refunds, only store credit (with two teen daughters and 3 large Forever 21 stores in our area, I have spent countless hours shopping and returning stuff) Originally, I thought that the policy was intended to deter people from buying a dress once, wearing it and returning it but apparently, it is to avoid problems with penny skimming (PS – did the women gypped out of a penny ever ask for a refund? What was the extra penny – a service charge or intentional skimming? Just rhetorical Qs)
There is always the choice of shopping elsewhere. I don’t buy where I can’t return, but then, my fashion sense is somewhat stilted. Is there no other option for two teenage daughters beyond Forever 21?
As for whether the penny is a “service charge,” that would have to be noted to the prospective purchaser in advance of the sale, so that they could decide whether they wished to complete the purchase under those terms. I’ve heard nothing to suggest that was the case.