NEW JERSEY — You’re a Walmart customer shopping for coffee, and you’re trying to compare prices. One item is measured by the can. Another is measured in pounds. Yet another is measured in 100-counts.
Find it tricky to tell which price is the best? You’re not alone – and that’s why the retail giant is paying the state of New Jersey a landmark $1.64 million legal settlement, officials say.
On Tuesday, the New Jersey attorney general’s office announced that Walmart has agreed to a deal that resolves allegations about “unlawful pricing practices” at the international chain’s 64 retail stores in the Garden State.
The settlement, which includes a $1.61 million civil penalty, is the largest ever obtained by the Office of Weights and Measures at the New Jersey Division of Consumer Affairs.
“We believe a settlement is in the best interest of all involved,” a Walmart spokesperson told Patch. “We’ll always work to provide our customers every day low prices they can count on.”
State officials are alleging that Walmart violated New Jersey’s Consumer Fraud Act (CFA) and Unit Pricing Disclosure Act (UPDA) by using inaccurate unit pricing for a variety of grocery products sold at the chain’s New Jersey locations.
These rules are in place for a reason, prosecutors said:
“The UPDA requires grocery retailers to display the price of food, cleaning products, coffee, cereal, and other regulated commodities using a standard unit of measurement set by regulation – such as quart, pound, or per 100 sheets. Unit pricing makes it easier for consumers to compare prices among like products packaged in different sizes or quantities to determine which is the best value for their money.”
But it seems that Walmart wasn’t playing ball in New Jersey, authorities allege.
A series of inspections at Walmart locations throughout the state during the first three months of 2023 showed more than 2,000 instances where the incorrect unit of measurement was used, prosecutors said.
In addition to using incorrect units of measurement, various units of measurement were often used within the same category of merchandise – such as using per can, per pound, or per 100-count for coffee, prosecutors said.
The result? It was nearly impossible for shoppers to tell if they were getting a good deal or not, prosecutors allege.
In addition to paying a $1,616,091 civil penalty and reimbursing the state $25,409 for investigative costs and attorney’s fees, the settlement requires Walmart to make changes to its business practices to prevent future violations.
Those changes include:
- Comply with all applicable state and federal laws and not engage in any unconscionable business practices or pricing violations as prohibited by the CFA, the Unit Pricing Disclosure Act, and the Unit Pricing Regulations
- Use the approved unit of measure for every regulated commodity sold or advertised
- Within 90 days of the settlement, incorporate training regarding Walmart’s obligation to comply with New Jersey’s unit pricing laws and regulations into the onboarding process for all new employees working in New Jersey Walmart stores who have pricing responsibilities
- Conduct internal audits for a period of three years, such that each New Jersey Walmart store is audited at least once a year. The internal audits will include the random sampling of 100 regulated items, and an audit revealing errors in more than 2% of the products sampled at any one store shall constitute a failed audit
- Semi-annually submit to the Division a corrective action plan for failed audits during the preceding six-month period, along with a summary of likely reasons and efforts to prevent future unit pricing errors
- Submit the first corrective action plan to the Division no later than one year after the effective date of the settlement
- Retain all reports and records of every internal audit for a period of three years and provide them to the Division upon request
“As the price of grocery items continues to rise, it’s more important than ever to ensure consumers have all the information they need—and are entitled to by law—to make educated decisions on how to spend their money,” Attorney General Matthew Platkin said.
“The significant fine Walmart will pay as a result of this settlement sends a clear message that New Jersey will not allow retailers to engage in unlawful pricing practices that deny shoppers the ability to easily compare prices to figure out which product is a better buy,” Platkin added.
Cari Fais, acting director of the Division of Consumer Affairs, said the settlement is an example of “holding companies accountable” for financial harm they inflict on shoppers.
“We’re putting chain retailers on notice that repeatedly violating New Jersey’s pricing laws will not result in fines they can easily absorb as the cost of doing business,” Fais said.
New Jersey isn’t the only state with mandatory unit pricing laws, prosecutors pointed out. Other states with similar provisions include Connecticut, Maryland, Massachusetts, New Hampshire, New York, Oregon, Rhode Island and Vermont.
Tuesday’s settlement isn’t the first time that state investigators have turned their attention Walmart’s way, prosecutors said, alleging that there is an “ongoing pattern of pricing violations” at the company’s stores in New Jersey.
“Prior inspections of Walmart stores statewide in 2021 and 2022 have led to a total of $226,950 in assessed fines against the retailer for unit pricing violations,” the attorney general’s office stated.
NJ CONSUMER PROTECTION
Consumers who believe that a business is in violation of New Jersey’s consumer protection or pricing laws are encouraged to file an online complaint. Consumers can also call 1-800-242-5846 to receive a complaint form by mail.
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