DeMarco v. DNVB, Inc. (Thursday Boot Co.), No. 25-CV-3076
(GHW) (RFT), 2025 WL 4378637 (S.D.N.Y. Dec. 5, 2025) (R&R)

Thursday Boot sells shoes, apparel, handbags, and
accessories on its website, which offers “free shipping and returns in the U.
S.” according to a banner at the top of the webpage. Each product on the
website is listed with an “Honest Pricing Guarantee,” promising the “Best Price
offered year-round.” Upon checkout, however, a “Shipping Protection” fee of
$2.98 was automatically added to the customer’s cart, with an option for the
customer to deselect the Fee. Customers are told that if the Fee is not paid
Thursday Boot “is not responsible for damaged, lost, or stolen items during
shipping.” However, defendant ships its products via UPS, which will reimburse
purchasers of lost or damaged packages. Defendant also has an Amazon storefront
on which it sells its products and offers free shipping, without the Fee.

Plaintiffs alleged violations of NY’s GBL (along with common
law contract/unjust enrichment claims which the magistrate recommended
rejecting). Although the magistrate thought there was no standing for
injunctive relief, the basic deception claim was plausible.

Whether the Honest Pricing Guarantee was a deceptive
practice depends on whether the Fee was misleading, which it plausibly was.
Defendant argued that there was no misleadingness because (1) the Fee was
clearly disclosed on the checkout page “in the same size and font as the
product price, together with an adjacent option to remove the charge”; (2)
shipping protection is distinct from shipping, so that a charge for shipping
protection did not negate Defendant’s promise of free shipping; and (3) the
shipping protection bought by the Fee provided value to buyers by allowing them
to recover from Defendant for lost or damaged packages, thereby relieving
buyers “of the responsibility to pursue relief” for lost or damaged packages
from the shipping companies.

But it was plausible the combination of the free shipping
representation and the negative option to remove the Fee was misleading to
reasonable consumers and that Defendant’s behavior was made more misleading by
Defendant’s last-minute inclusion of the Fee, aka “drip pricing.” Plus, the
statement that Defendant was “not responsible for damaged, lost, or stolen
items during shipping” could plausibly lead “a consumer to believe that they
will bear all risk of loss” if they did not pay the Fee, even though buyers
were already entitled to such compensation.

Full disclosure occurs when a party “is provided with all
the information necessary to understand [a] practice and its consequences.” Whether
the disclosure provided plaintiffs with sufficient information to understand
the significance of the Fee was a question of fact that couldn’t be assessed on
a motion to dismiss. While a reasonable consumer would understand the
difference between shipping and shipping protection, “the website provided
insufficient information to allow reasonable consumers to understand the nature
of the shipping protection secured by the Fee.” A reasonable consumer likely
would be unaware that the carrier would, under ordinary contract principles,
bear the risk of loss or damage during transit. The check-out statement that if
a customer did not pay the Fee, defendant would not be “responsible for
damaged, lost, or stolen items during shipping” was “technically accurate,” but
the failure to disclose that the carrier was responsible for loss or damage
during transit might “undermine [the] consumer’s ability to evaluate his or her
market options and to make a free and intelligent choice.”

Also, even if a reasonable consumer would have understood that
the shipping fee added defendant’s commitment to bear the risk of loss or
damage, it wasn’t clear that they would know that the fee was optional.  Adding the fee to customers’ carts at the very
end of the transaction “added to the confusion and could plausibly have misled
reasonable consumers about whether the Fee was optional.” Articles cited by the
defendant in support of its motion to dismiss, which state that offering
shipping protection has become commonplace, “also opine that adding fees for
shipping protection at the end of the transaction is misleading to the average
consumer.”

from Blogger http://tushnet.blogspot.com/2026/02/shipping-protection-fee-providing-no.html