‘Excessive' Shipping Fees May Be Next Target Of Consumer Class Actions

Retailers offering online, telephone or catalog purchases may want to review the shipping fees charged to their customers in the wake of several class actions recently filed in California. Multiple retailers have been hit with consumer class actions challenging their shipping fees as exceeding the actual shipping costs incurred by retailers in fulfilling customer orders.

These cases typically rely on Article 11 of the Data and Marketing Association's Guidelines for Ethical Business Practice, which provides that "[p]ostage, shipping, or handling charges, if any, should bear a reasonable relationship to actual costs incurred." Plaintiffs also frequently cite a Federal Trade Commission consent judgment in which an auto dealer consented to stop charging customers "freight" charges in excess of the actual cost to the dealer to transport vehicles to its showroom. In the Matter of Bill Crouch Foreign, Inc. d/b/a Bill Crouch Imports, Inc. (Formerly Mazda of Boulder, Inc.),