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Walgreens Settles Pricing Lawsuit for $1.4 Million

The retailer, which four locations in Marin, agreed to terms after being sued by district attorneys in four Northern California counties.

Walgreens will pay $1.4 million for overcharging consumers by failing, on multiple occasions, to make sure prices on its store shelves matched the prices charged at the cash register. The settlement was announced today in a release sent by the Santa Clara District Attorney’s office.

There are four Walgreens stores in Marin: at 227 Shoreline Hwy. in Mill Valley, 820 Sir Francis Drake Blvd. in San Anselmo and 830 Third St. and 155 Northgate One in San Rafael.

The money will be split between the four counties that originally brought the suit and Weights and Measures departments in 27 locales that helped in the investigation, according to Martha Donohoe, a Deputy District Attorney in the Consumer Protection Unit of the Santa Clara County District Attorney’s office. The counties will use their shares to fund consumer protection activities and the weights and measures departments will use theirs to recoup the costs of the investigation.

The company, which has 625 stores in California, also had been advertising discounted prices for using “Register Reward” coupons without clearly disclosing that the coupons required another purchase in order to benefit from the savings.   

"Consumers have a right to expect that products will be accurately priced.  They should be protected from careless or intentional pricing errors," Santa Clara District Attorney Jeff Rosen said. "Our office brings actions such as this to assure that merchants have policies and procedures in place to fulfill their obligations to sell merchandise at the advertised prices.”  

As a result of the lawsuit, Walgreens within 60 days will offer a Scanner Price Guarantee to compensate consumers who find price discrepancies at the time of check out. If a consumer notifies the cashier that the price rung up is more than the lowest advertised price for an item, the consumer will receive either a $5 deduction or a $5 merchandise card. If the item is under $5, the customer can have the item for free. The terms of the Scanner Price Guarantee will be posted in every Walgreens store in California.   

“We are fully committed to fair pricing, accurate scanning, fully informing our shoppers and giving our customers the products they want at competitive prices,” said Walgreens spokesman Jim Graham in an email. “This agreement underscores our commitment to our customers and to providing the best shopping experience. As the district attorneys stated, we cooperated with their inquiry and did not admit any wrongdoing. Previously, California district attorneys had worked with other retailers to arrive at agreements similar to the one we have reached with them.”

Walgreens did not admit wrongdoing in this case. The company cooperated with prosecutors during the investigation. The case was investigated by state and local Department of Weights and Measures offices, which conduct regular inspections of scanners in retail establishments statewide. 

The settlement was the second Walgreens struck with California district attorneys in less than a month. In December, the retailer was ordered to pay $16.57 million to settle a lawsuit claiming that more than 600 of the chain's stores in California, including the four Walgreens in Marin, illegally dumped hazardous waste and unlawfully disposed of customer records containing confidential medical information.

Tell us in the comments: Is $1.4 million an appropriate settlement? 

Frank O'Shea January 10, 2013 at 11:19 PM
Don't consumers get a share of the settlement? A "price guarantee" after the fact doesn't cut it.

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