Michaels to Pay $1.8M Settlement Over Deceptive Advertising

Michaels Stores, Inc. has agreed to pay $1.8 million to settle allegations of deceptive advertising practices in connection to its “50% Off Custom Framing” coupons brought by New York Attorney General Eric T. Schneiderman. The Michaels settlement will provide $1 million in gift cards to public schools throughout New York and could open the door to a consumer class action lawsuit over its alleged illegal advertising practices.

According to Attorney General Schneiderman’s allegations, Michaels used “50% Off” coupons and other marketing materials to mislead customers into believing they were receiving “steep discounts” on custom framing for more than two years. Michaels advertised the 50% Off discount every day during the AG office’s two-year investigation. The law prohibits sales that are never ending, the AG said.

“For years, Michaels duped consumers into thinking they were receiving huge discounts, when in fact, they were simply paying their regular store price,” Schneiderman said in a statement. “Through deceptive advertising practices, this company violated the law and took advantage of hardworking consumers trying to save money. In addition to the civil penalties, the company is paying for their actions by providing $1 million in school supplies for hundreds of school districts statewide.”

The Michaels coupon settlement is the latest blow for the arts-and-craft store company, which was hit with a series of class action lawsuits earlier this summer after it revealed customers may have been victims of PIN fraud.