In a major win for consumers, Walmart has agreed to a $5.6 million settlement in California to resolve allegations of overcharging customers for baked goods and produce that weighed less than advertised, a move spearheaded by district attorney’s offices aiming to ensure fair pricing and bolster consumer trust.
The core of the legal action revolved around accusations that Walmart’s pricing methods violated California’s strict False Advertising and Unfair Competition Laws, which mandate that retailers must always charge the lowest advertised price, a principle this lawsuit aimed to uphold for shoppers.
Santa Clara County District Attorney Jeff Rosen articulated the foundational principle driving such legal actions, stating, “When someone brings an item to the register to be scanned, the price must be right.” He further emphasized the collective expectation for accuracy, adding, “They expect it. California expects it. My office expects it – and we will apply the law to make sure of it.” This sentiment highlights the unwavering resolve of regulatory bodies to enforce pricing integrity.
Under the terms of the $5.6 million settlement, a substantial portion, specifically $5.5 million, is earmarked for civil penalties. An additional fee of nearly $140,000, precisely $139,908.92, is allocated to cover the extensive costs of investigations conducted by various Weights and Measures departments across the state. This financial distribution reflects the serious nature of the violations and the resources dedicated to their investigation.
Significantly, Santa Clara County is set to receive close to $1.4 million, specifically $1.375 million, of the settlement money. This allocation will directly contribute to the district attorney’s Consumer Protection fund, reinforcing the financial capacity of the office to pursue future cases aimed at safeguarding consumer rights. Such funds are vital for ongoing enforcement efforts.
Beyond financial penalties, the settlement imposes significant operational changes on Walmart’s California stores, requiring employees to diligently monitor weight and price accuracy and establishing regional compliance associates to support store managers in maintaining accurate pricing.
This judgment also includes a clear prohibition against Walmart engaging in any false or misleading advertising, a crucial step to protect consumers, although the company has not admitted any wrongdoing, it has shown cooperation with state inspectors and prosecutors.
Kelly Hellbusch, a spokesperson for Walmart, conveyed the company’s perspective on the resolution, stating, “We’re pleased we were able to resolve this matter.” This statement reflects the conclusion of a significant legal challenge, allowing the corporation to move forward while implementing the required compliance measures. Walmart operates an extensive network in California, with 10 stores located in Santa Clara County and a total of 280 across 42 counties within the state.
This is not Walmart’s first encounter with such allegations concerning pricing and weight accuracy. A precedent was established in 2012 when the company paid a $2.1 million fine in a similar case for overcharging customers. That prior settlement itself was a consequence of Walmart’s alleged failure to comply with a 2008 judgment, which had previously mandated the company to resolve errors in pricing at checkout stands. This history indicates a recurring challenge in ensuring consistent pricing compliance across its vast operations.
Expanding beyond the California-specific settlement, Walmart has navigated other significant legal challenges related to pricing and weight in recent periods. In June of last year, for instance, the retailer agreed to a $1.64 million settlement following allegations of illegal pricing practices detected at 64 of its locations in New Jersey. This agreement included a $1.62 million civil fine, which notably represented the largest civil fine ever issued by New Jersey’s Office of Weights and Measures.
Inspections conducted at various Walmart locations in New Jersey during that period revealed over 2,000 mismeasurements, alongside instances where products were priced in a variety of inconsistent ways. New Jersey law places a clear emphasis on the requirement for grocery stores to display prices clearly and understandably, aiming to prevent any potential confusion among shoppers. These incidents underscore the breadth of regulatory scrutiny Walmart faces across different jurisdictions.
Further demonstrating the pervasive nature of these issues, earlier in 2024, Walmart reached a substantial $45 million settlement in a class action lawsuit focused on alleged overcharges for “weighted goods.” This national lawsuit, filed in the Middle District of Florida in 2022, presented a broader set of allegations concerning the company’s pricing integrity across the United States and Puerto Rico. The scope of this class action highlights a systemic concern regarding pricing accuracy.
The class action lawsuit specifically alleged that Walmart engaged in three primary deceptive tactics, resulting in customers paying more than the stated price for certain items. It claimed that Walmart’s point-of-sale (POS) system “artificially” increased the weight of products upon checkout, leading to customer overpayments. This points to a potential issue with the underlying technology or its configuration in calculating prices.
Moreover, the lawsuit asserted that Walmart mislabeled the weight of bagged organic oranges, grapefruit, tangerines, and navel oranges. These items were allegedly labeled with weights that were “materially more” than their actual weight. This specific allegation suggests a discrepancy between the printed labels and the true quantity of the product, directly impacting the final price paid by the consumer.
The third key allegation in the class action focused on weighted goods sold on clearance. The lawsuit claimed that Walmart allegedly overcharged the sticker price on certain sold-by-weight clearance products. This implied that even discounted items were subject to incorrect pricing, further eroding consumer trust and potentially violating fair trade practices.
Central to the class action’s argument was the assertion that Walmart’s alleged conduct was “systemic and driven by its POS System and software that is programmed to falsify weights and, thus, overcharge the customer for the products.” The plaintiffs’ experiences and counsel’s investigation revealed that “the frequency and consistent pattern of the falsification practices are not mere errors. Rather, they are symptomatic of a programmed fraudulent scheme,” according to the lawsuit. This strong language conveys the perceived gravity and intentionality of the alleged practices.
In response to the $45 million class action allegations, Walmart categorically denied any wrongdoing or liability. The company stated that neither the court nor a jury had considered or decided the merits of the allegations presented in the lawsuit. Despite its denial, Walmart ultimately decided to settle the case, citing the desire to avoid the significant costs and inherent risks associated with proceeding to a full trial.
A spokesperson for the Bentonville, Arkansas-based corporation reiterated the company’s commitment to its customers’ financial well-being, stating, “We will continue providing our customers everyday low prices to help them save money on the products they want and need. We still deny the allegations, however we believe a settlement is in the best interest of both parties.” This statement reflects a strategic decision to resolve the dispute efficiently.
The substantial $45 million settlement provides a path for restitution to countless Walmart shoppers nationwide and in Puerto Rico who purchased weighted goods or bagged citrus between October 19, 2018, and January 19, 2024.
Consumers who believe they’re eligible for a payout under this class action settlement have until June 5, 2024, to submit their claim either online or by mail, emphasizing the need for prompt action to secure potential compensation.
The amount of compensation can vary significantly depending on whether a shopper has proof of purchase, with those retaining receipts potentially receiving up to 2% of their spending on eligible items, capped at $500, offering a substantial recovery for diligent record-keepers.
For customers without proof of purchase, the settlement still provides a form of recompense, offering payments between $10 and $25 based on the quantity of relevant items purchased, ensuring some redress is available even without detailed transaction records.
The final approval hearing for the $45 million class action settlement is scheduled for June 12, 2024. Once approved, eligible payments will be transferred to claimants electronically, or by check if specifically requested. This structured process ensures a clear path for the distribution of funds to the impacted consumers, concluding a complex legal process.
These numerous settlements underscore the critical role played by various regulatory bodies and consumer protection units. The investigation into the California $5.6 million settlement, for example, received significant assistance from Santa Clara County’s Weights and Measures Division, the Department of Environmental Health, and the Division of Agriculture. Such inter-agency collaboration is essential for thorough investigations and effective enforcement.
San Bernardino County District Attorney Jason Anderson emphasized the unwavering commitment of such units. He noted, “Our Consumer Protection Unit works tirelessly to hold retailers accountable for their legal obligations and to ensure that our residents are able to trust that the advertised quantity, weight, and price of a product is accurate.” This highlights the ongoing vigilance required to maintain market fairness.
To further assist consumers in addressing potential issues, clear reporting channels are available, allowing residents in Santa Clara County to report weight discrepancies to the Weights and Measures Division via online forms, email, or phone, and similarly, San Bernardino County consumers can report overcharges to the Department of Agriculture, Weights and Measures.
The resolutions of these lawsuits, spanning local, state, and national levels, send a clear message regarding the paramount importance of accurate pricing and weight in retail transactions. They reinforce the principle that consumer trust is foundational to commerce. These settlements serve not only as a financial redress for affected customers but also as a powerful reminder to all retailers of their legal and ethical obligations to transparency and precision in every sale. The continued vigilance of consumer protection agencies ensures that the commitment to fair trade practices remains unwavering, safeguarding the integrity of the marketplace for everyone.
