Furst v. Einstein Moonjy, Inc.

A consumer decides to purchase an “on sale” 3′ x 6′ carpet for $3,000.00. The original sticker price before the “mark down” was $6,000.00. The sticker incorrectly sets forth or misrepresents that the carpet is 3′ x 6′. Two weeks later the carpet is delivered. It is damaged and only 2′ x 4′. The consumer complains. In response to the same, the store offers to give the consumer a refund or a similar carpet at a larger price

Is this a violation of the New Jersey Consumer Fraud Act? If so, does the trial court treble the sale price or the original price?

The New Jersey Supreme Court in Furst v. Einstein Moonjy, Inc. found that the above-described situation is a violation of the Consumer Fraud Act and held that the consumer is entitled to three times the “replacement cost,” plus attorneys’ fees and costs. The New Jersey Supreme Court also held that there is a presumption that the original non-sale price is the “replacement cost.” The New Jersey Supreme Court set forth this policy in order to prevent businesses from fraudulently marking up and down merchandise to give the appearance of a sale.

The Furst decision is extremely important for both businesses and consumers. Businesses must think twice about making up or inflating the original price of goods. In addition, businesses must be extremely careful when making representations. A representation can easily become an actionable misrepresentation under the Consumer Fraud Act even if the seller does not intend to make a misrepresentation.