Wal-Mart Agrees To Settlement In The Desert

A consumer fraud lawsuit was filed by Arizona Attorney General Terry Goddard back in 2006 after his office found that from 2001 to 2006, Wal-Mart consistently rang up the wrong prices on items scanned in at the cash registers. It also failed frequently to put prices on items on the shelves, leaving consumers in the dark about overcharges. Now, nearly three years after it was first filed, Wal-Mart’s pricing case in Arizona has concluded.

Wal-Mart Stores has agreed to pay $1 million and hire independent monitors to ensure price accuracy at its Arizona stores under terms of a settlement with the Arizona Attorney General’s Office…

Wal-Mart, which trumpets its low prices, racked up nearly a half-million dollars in fines for problems including discrepancies between posted prices and checkout prices and the lack of posted shelf prices on many products. Attorney General Terry Goddard said Wal-Mart never fixed the underlying problems, instead paying the fines as if they were the cost of doing business.

On top of the money Wal-Mart has already paid out, the $1 million fine will be used to pay for the independent monitoring, and a portion of it will go to the AG’s office to pay for consumer education. Goddard’s Office has maintained that while the pricing irregularities were bad, the biggest problem revolved around the consumer’s inability to tell the true cost of a product at the point of sale.

The Yuma Sun has more details on the settlement:

The deal requires Wal-Mart to hire and pay for an independent monitor to conduct random checks of compliance with state pricing laws at each of the company’s 93 stores in the state during the next three years. Any time compliance at any store dips below 98 percent - meaning more than two items out of 100 checked are not priced or improperly priced - the company will pay a $2,500 fine. Repeat failures each would result in $5,000 penalties.

Back in 2006, Wal-Mart entered into a $1.5 million settlement with the Michigan Attorney General for similar pricing errors.

Arizona AG reaches pricing lawsuit settlement with Wal-Mart [Yuma Sun]

BY HOWARD FISCHER, CAPITOL MEDIA SERVICES

PHOENIX - The nation’s largest retailer agreed Tuesday to an outside monitor to make sure it is complying with state laws requiring accurate prices be posted on or near all products offered for sale.

In an 18-page settlement filed in Maricopa County Superior Court, Wal-Mart did not admit to any of the claims made when the Attorney General’s Office sued nearly three years ago.

Some of those claims pertain to the fact that items scanned at cash registers would ring up at a price different than posted. But the bigger problem, said Goddard, was the inability of consumers to be able to tell the price at the point of sale.

The deal requires Wal-Mart to hire and pay for an independent monitor to conduct random checks of compliance with state pricing laws at each of the company’s 93 stores in the state during the next three years. Any time compliance at any store dips below 98 percent - meaning more than two items out of 100 checked are not priced or improperly priced - the company will pay a $2,500 fine.

Repeat failures each would result in $5,000 penalties.

In addition, Wal-Mart agreed to pay $1 million, part of which will go to Goddard’s office for consumer education and part which will be used to pay for the independent monitor.

At a news conference Tuesday, Goddard praised Wal-Mart for agreeing to the deal.

“The announcement that we’re making today is, in fact, a big step forward, a milestone if you will, in making sure that Arizona consumers do, in fact, get the very most accurate prices when they’re shopping,’’ he said. And Goddard said the deal sends a message to other merchants.

“If the largest retailer can meet the standards of as near as possible perfect pricing, then I believe everyone can meet that standard,’’ he said.

Arizona law used to require that prices be stamped on each item.

But state legislators, responding to retailer complaints of costs, what with the new scanner technology, agreed in 1993 to scrap that mandate.

In exchange, however, stores agreed to abide by laws which require that the price of every item be posted on the shelf or near each display. The law also requires that the prices that are rung up by the scanners match those shelf prices.

The law is policed by the state Department of Weights and Measures which sends inspectors into stores to check that prices are posted. They also pick a random sample of items, bring them to the registers, and compare the price charged with the shelf price.

When Goddard sued in 2006 he said Wal-Mart failed more than half the compliance inspections conducted by the state Department of Weights and Measures at its then 70 Arizona stores from the beginning of 2001.

At that point it had paid fines in excess of $450,000. Goddard said he sued because he thought Wal-Mart was treating the fines simply as “a cost of doing business because they have continued doing exactly what they were doing.’’

Part of the problem, Goddard said, is state law limits the fines that can be imposed by Weights and Measures. At the time the lawsuit was filed, the maximum penalty was $500 per violation. But the law limited total fines on any one store to no more than $5,000 per month.

Lawmakers have since doubled those figures.

But going after Wal-Mart under consumer fraud laws, however, gave Goddard a bigger hammer: It allows penalties of up to $10,000 per violation.

The attorney general said at the time, though, he would never use that authority to go after a retailer with just a few violations, or even one with multiple infractions over the course of a year.

Goddard actually filed two lawsuits in 2006. The second, against AutoZone, is still awaiting trial in Maricopa County Superior Court.

Goddard said he chose those two retailers for the first lawsuits because of their size and history of violations.

CONSUMER TIPS
Ways consumers can protect from being overcharged:

• Bring newspaper ads with you so you can compare prices.

• Write down prices on items, using pens or other devices that stores are required to provide.

• Watch the display at the checkout counter to ensure the prices match what is on the shelf.

• Speak up immediately when you see scanning errors.

• Ask for the store’s written policy on errors, which all are required to have; some stores give customers items that are inaccurately scanned.

• Check your receipt before you leave the store.

• Call the Department of Weights and Measures at 1-602-771-4920 in the Phoenix area, or 1-800-277-6675 elsewhere, if an error is not fixed to your satisfaction.

Posted by Corey Himrod on Wednesday, May 20, 2009

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