Retail

Wal-Mart Settles for False Advertising

September 23, 2014
By Stephanie West

 Rochester, NY – Retail chain Wal-Mart Stores, Inc. has agreed to a settlement for false advertising. The  investigation was conducted by  the New York State Attorney General’s Office. Wal-Mart advertised a nationwide sale of Coca-Cola soft drinks but charged customers in their 117 stores across New York State more than the advertised sale price.

In June 2014, Wal-Mart launched a Father’s Day sale, including advertising 12-packs of Coca-Cola products for $3.00. However, when consumers in New York State attempted to purchase the sale items, customers were routinely charged $3.50. According to the investigation by the Attorney General’s Office, in one Buffalo-area Wal-Mart store a consumer brought the error to the attention of staff and was told that the newspaper circular was a national ad and that it did not apply in New York. When consumers complained about being charged more than the advertised price, Wal-Mart staff falsely told them that New York has a ‘Sugar Tax.’ The investigation concluded that the markup of over 16% above the advertised price violates New York State’s General Business Law 349 and 350.

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that is why our office must ensure that even the largest corporations cannot advertise one price and then charge a higher one to New Yorkers,” said Attorney General Schneiderman. “Whether it’s securing the largest financial settlements in U.S. history to address misconduct that crashed the economy, or settling cases with the nation’s largest retailers, this office will continue to stand on the side of ordinary New Yorkers.”

During the course of the investigation by Attorney General Schneiderman’s office, consumers were routinely overcharged in stores across the state. It was determined that cash registers were programmed to not recognize the advertised sale price. On June 12, 2014, the Attorney General’s Office requested that Wal-Mart immediately adjust prices to the amount advertised. Wal-Mart took corrective action after approached by the Attorney General’s Office.

The investigation also determined that Wal-Mart ran a similar sale in March that resulted in the company failing to honor the advertised price for Coca-Cola soft drinks in New York. Despite documented complaints from consumers about the price discrepancy, the company failed to adjust prices until requested by the Attorney General’s Office.  In total, Wal-Mart sold New Yorkers 66,000 12-packs of Coca-Cola at an inflated price. The settlement requires Wal-Mart to pay over $66,000 in penalties and other costs, to improve its internal reporting to more quickly act on information it receives from consumers about overcharges, and to change business practices to comply with state law.

September 22, 2014

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