Wal-Mart flunks price accuracy tests, pays $1 million settlement

×
For five years, state inspectors in Arizona went into Wal-Mart stores to check whether the prices paid at the register matched the price they were supposed to be sold for. The results weren't pretty: Wal-Mart flunked more than half of the 976 inspections.

""In today's tough economy, consumers need accurate price information to comparison shop and decide what to buy with their hard-earned money," Arizona Attorney General Terry Goddard said in a statement.
Faced with the ongoing issue of inaccurate pricing in Arizona, that state's attorney general sued the retail giant in 2006, alleging consumer fraud. Wal-Mart settled the suit this month, agreeing to pay $1 million (on top of more than $450,000 in fines already paid) and subjected 40 of its 92 Arizona stores to rigorous independent monitoring for three years. Every store that fails inspection will lead to a $2,500 fine. A failed re-inspection will cost the company $5,000. To pass inspection, at least 98 of every 100 items scanned must ring up at the correct price.

In addition to scanning inaccuracies, Arizona inspectors cited Wal-Mart for numerous instances of not posting prices -- giving consumers no way to know what certain items cost until they went to the register.

"Every day, customers rely on Wal-Mart to help them save money. Accurate pricing is an important part of that commitment," Wal-Mart spokeswoman Delia Garcia said. "We strive for 100 percent price accuracy, and when we do find a discrepancy, we are committed to making it right for our customer. This has long been our practice, and today we are taking this commitment a step further.

"We have already begun to implement measures from this agreement, such as improved training and rigorous internal inspections. We are seeing a reduction in discrepancies. The addition of an independent monitor to this process will further ensure that inspections are conducted fairly and objectively and most importantly reassure our valued customers that the price they see on the shelf is the price they pay at the register."

Still, the situation in Arizona mirrors what happened in several other states, including California -- raising the question of what's going on in states that are less aggressive in monitoring scanner accuracy.

California consumers learned they had the price accuracy problem in 2005. In November, California officials settled a case against Wal-Mart for $1.4 million and the pledge to give consumers $3 off the item at the register for each inaccurately scanned product. California's attorney general said scanner error were found in 164 Wal-Mart stores in that state Those overcharged paid an average of $8.40 too much.

"Consumers saw one price in the aisles, but were charged a higher price at the cash register," California Attorney General Edmund G. Brown Jr. said at the time.

It faces an uphill battle. In 2005, researchers at the University of California at Berkeley and the University of Illinois Chicago Center for Urban Development revealed they found 87% of California stores visited failed price accuracy tests and 85% of those in Illinois, Michigan and Indiana also flunked. Both studies found that when customers paid too much the mean price discrepancy was more than $1 per item.

Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Add a Comment

*0 / 3000 Character Maximum