Whole Foods to pay $800,000 to settle allegations of overcharging customers

Whole Foods Markets has settled a case brought by local prosecutors regarding overcharging customers for prepared foods purchased by consumers across the state.
According to a statement released by the City of Santa Monica, city attorneys in Santa Monica, Los Angeles and San Diego filed a civil consumer protection case on behalf of all California residents alleging the business: failed to deduct the weight of containers when ringing up charges for self-serve foods at the salad bar and hot bar; gave less weight than the amount stated on the label, for packaged items sold by the pound; sold items by the piece, instead of by the pound as required by law (meat, fowl and fish items such as kebabs and other prepared deli foods).
"Consumers have a right to accurate pricing - and the right to pay for only what they bought," said Deputy City Attorney Adam Radinsky. "By adding the weight of containers and packaging, especially on higher-priced, per-pound items like seafood and meats and even prepared food, the extra charges can add up fast, and yet be hidden from consumers."
Radinsky said consumers may not have noticed the additional charges but he said customers could have lost up to a couple of dollars per transaction depending on the amount they purchased.
"We hope this case will serve as a wake-up call to supermarkets and other food retailers to make sure their per-pound charges are accurate. Consumers should always pay close attention to their purchases and make sure that the store deducts the weight of all packaging and containers."
The company agreed to pay almost $800,000 in penalties and investigative costs. Radinsky said Whole Foods would pay $798,394 in penalties including $630,000 in civil penalties, $100,000 to a statewide weights and measures enforcement trust fund, and $68,394 in investigative costs.
Radinsky said the case emerged out of an investigation by local Weights and Measures inspectors. He said local officials found discrepancies at several local stores and upon further investigation, attorneys found a history of similar problems state wide. He said Whole Foods chose to settle rather than take the case to court.
"When there's a consumer protection investigation on a company that shows problems, violations of law, we go to the company say 'this is what we have' and ask them to work with us on a court judgment and agreeable terms," he said. "We're glad they agreed to work with us."
According to Radinsky, much of the problem stemmed from Whole Foods lack of consistent policies.
"The sheer variety of the containers they use at the lunch deli, six, seven, eight different sizes and shapes of container, the cashier is put in the position of having to know what to charge," he said. "They have different systems at different stores, there was no uniform statewide practice on this, the result was our inspectors would see, especially during the noon rush for example, cashers may be in a rush with a long line of customers waiting and may not be able to gauge the weight of these containers properly."
The company will also be subject to a five-year court order that covers all 74 Whole Foods in California, including the three stores in Santa Monica.
Under the order, Whole Foods is required to: Appoint two "state coordinators" to oversee pricing accuracy at Whole Foods stores throughout California; designate an employee at every store in the state who will be responsible to assure pricing accuracy throughout the store; conduct random audits at each of its stores, four times per year, to assure that all prices are accurate and that proper weight is being deducted for all containers; charge accurate prices and provide the advertised weight on all items.
matt@www.smdp.com