Rite Aid Corporation has agreed to pay $800,000 for false and deceptive advertising. The company has settled a civil law-enforcement suit with the Santa Clara County District Attorney's Office and DA offices in Riverside and Ventura counties, the Santa Clara County DA has announced.
The suit filed in San Diego County alleged that Rite Aid violated state laws prohibiting false and deceptive advertising in its +Up Rewards and Wellness card advertising campaigns. The company also failed to redeem gift cards with a cash value of less than $10.
The complaint alleges Rite Aid advertisements conveyed to consumers that they would pay lower prices for items purchased using the Rite Aid Wellness+ Card.
Once at the register, the customer could not purchase the item at the advertised price. Instead, the customer received a printed coupon printed on the end of their receipt for savings on a future purchase. The coupon had an expiration date and other restrictions.
Rite Aid failed to adequately inform consumers that the product could not be purchased at the advertised price.
In the settlement, Rite Aid agreed to clearly display the program's limitations and all the conditions necessary for customers to purchase items for advertised prices.
Rite Aid will also program their credit card terminals to inform the customer when their gift card has a balance of less than $10. The terminal will be prompted to ask the customer if he or she wishes to redeem the gift card for the cash balance.
"This is a victory for all California consumers. The law provides that advertising must be clear such that the consumer knows what he or she will pay for an item before making a purchase and it must not be deceptive," Santa Clara County Prosecutor Tina Nunes-Ober said.
Santa Clara County, home to 21 Rite Aid stores, will receive $175,000 in civil penalties and be reimbursed $1,457 for the costs of the prosecution. Rite Aid will be bound by the terms of a permanent injunction prohibiting similar violations in the future.