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Uploaded: Thursday, January 10, 2013, 11:56 AM
Walgreens to pay $1.4 million to settle suit
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Walgreens has agreed to pay $1.4 million in penalties and legal costs to settle a lawsuit accusing the retailer of charging prices higher than marked on store shelves, a prosecutor said.
Also, Walgreens must offer discounts for the next three years to customers who discover they were charged more than the lowest advertised price, Santa Clara County Deputy District Attorney Martha J. Donohoe said.
The settlement, reached in Santa Clara County Superior Court in San Jose on Wednesday, settles a lawsuit filed jointly by prosecutors in Santa Clara, San Mateo, Contra Costa and Santa Cruz counties.
Walgreens did not admit wrongdoing and cooperated with prosecutors in the case, Donohoe said. Vivika Panagiotakakos, a spokeswoman for Walgreens at its headquarters in Deerfield, Ill., said that the company does not yet have a response prepared about the case.
Donohoe said that Walgreens probably does not do it deliberately (charging prices higher than marked on store shelves). "My impression of Walgreens is they don't like to have these actions against them," she said. "Many scanner cases are brought and result in bad publicity."
"A lot of the times it is not intentional, they failed to take down sales prices, they didn't take shelf tags down, or prices were set by the corporation and they didn't know," Donohoe said. "It can be human error."
"Scanning cases are not uncommon," she said. "It is not a perfect technology."
The prosecutors also accused Walgreens of telling consumers they were eligible for discounted prices through "Register Reward" coupons without informing them they had to buy another item to get the discount, she said.
The settlement, to affect 625 Walgreens stores in California, took place three years after a store customer in Santa Clara County told county officials that products at a Walgreens outlet cost more after they were scanned at cash registers, Donohoe said. "There was definitely a consumer complaint that got the ball rolling," Donohoe said.
Under the settlement, Walgreens will be assessed $200,000 to cover investigation costs and $1.25 million in civil charges, Donohoe said.
In addition, all Walgreens stores in California will have to give either a $5 deduction or a $5 merchandise card each time a customer finds out she or he was charged more than the lowest advertised price, Donohoe said. If the product cost less than $5, Walgreens must let the patron have it for free, Donohoe said.
Walgreens will have 60 days to post notices about the offer, called the Scanner Price Guarantee, in all of its stores in the state and the guarantee must continue for the next three years.
Santa Clara County previously sued Walgreens for price scanning violations in 2007, Donohoe said.
The district attorney's office has no estimate on how much money consumers may have lost due to the overcharging, Donohoe said.Jeff Burbank, Bay City News Service Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
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Posted by Is-Walgreens-A-Good-Corporate-Neighbor?, a resident of Another Palo Alto neighborhood, on Jan 10, 2013 at 12:22 pm It was just last month that Walgreens was in the news for illegal dumping practices--
Walgreens to pay $16.57 million for violations:
Web Link
Now .. it seems that they have the Santa Clara DA looking into their business practices.
> "Scanning cases are not uncommon," she said. "It
> is not a perfect technology."
This comment does not make a lot of sense. The scanned codes (usually Bar Codes) are used as a key into a database to obtain the product description and the price. If the database does not match the price on the shelf, then there will be a mismatch. The question is--where do the prices on the shelf come from, and what forces the local stores to change the posted prices once the prices in the databsse are changed. Errors in "scanning" would result in a different kind of error.
Missing from this article is just how the DA came to look into this situation. People might have compared their receipts to advertised prices, or gone back into the store and compared their receipts to posted prices. It would be very helpful to know what would trigger a DA's investigation for what is effectively fraudulent business practices. Presumably there is a law that requires a retailer to charge the customer the advertised/posted price, but without have continuous checking of receipts--there is really no way to know if your favorite retailer is ripping you off, or not.
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Posted by Maria, a resident of the Old Palo Alto neighborhood, on Jan 10, 2013 at 5:27 pm Someone should go after Safeway, given that the prices they display are never the same at the register. I hate them because of this.
Walgreens is either paying for incompetence or for deliberate bait and switching, which is illegal. There should be no excuse for this sort of incompetence. We have a retail business with 200 SKUs. Once in a blue moon there is a human error, but we're small. They're a massive retail outlet. I highly doubt that it's incompetence.
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Posted by Nayeli, a resident of the Midtown neighborhood, on Jan 10, 2013 at 11:36 pm I agree, Maria! The Safeway on Middlefield often charges more than what is advertised.
In fact, Safeway's new "Just For You" program will boast a certain price when it has been "added" to your card. However, I have had to argue with workers -- and even show the price via Safeway's app on my cell phone -- just to "prove" the advertised price. They almost always blame it on a "glitch" in this store's system.
Between that and the inability to keep enough advertised items in stock (Diet Coke, seriously?), this local store is just not worth my business. It seems like they are out of one of the "get-you-in-the-store" sale items at least every week.
Just this morning, I went to pick up one of their "$2.49 if you buy two small sandwiches" for lunch. The woman behind the counter told me that they "ran out of bread" and that I should "come back tomorrow or Saturday."
I don't think that stores like this realize that it leaves a bad impression on the rest of us. Then again, they are a little cheaper than the other grocery stores in town and we are left with little options in Palo Alto.
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