Home Depot will pay nearly $2 million to settle a civil law enforcement complaint alleging overcharging and false advertising.
The $1,977,251 settlement involves a problem often called a “scanner violation” in which the price on the item or the item’s shelf tag is not the same as the one charged when the UPC code is scanned at the point-of-sale (POS) device or register, the Los Angeles County District Attorney’s Office said in a Thursday (Sept. 12) press release.
“This settlement is a clear message that such behavior will not be tolerated and underscores our commitment to safeguarding the rights of consumers in our community,” Los Angeles County District Attorney George Gascón said in the release.
Home Depot did not admit wrongdoing, was cooperative in the investigation and has taken steps to correct the violation, according to the release.
Reached by PYMNTS, George Lane, manager of corporate communications at Home Depot, said in an emailed statement: “To ensure consistency for our customers, we’ve updated the timing of our price changes.”
Under the judgment negotiated with the company, Home Depot was prohibited from engaging in false or misleading advertising and charging an amount greater than the lowest price posted for an item; was required to implement a price accuracy program that adds more audits and training and eliminates price increases on weekend days; and was required to pay $1,700,000 in civil penalties and $277,251 in costs and restitution, according to the release.
“False advertising and unfair competition are serious offenses that undermine consumer trust and distort the marketplace,” Gascón said in the release. “When companies engage in deceptive practices, they not only cheat consumers but also gain an unjust advantage over businesses that operate ethically and transparently.”
The news came about two months after Gascón announced that Home Depot settled a separate consumer protection lawsuit alleging that the retailer violated a state law mandating cash redemption for gift cards under $10. In that case, Home Depot paid $750,000 to settle the civil lawsuit while admitting no wrongdoing.
Meanwhile, Walmart encountered an internal system failure in March that resulted in widespread mispricing at 1,600 of its stores, with some items being sold at incorrect lower prices and others at higher prices.
Walmart spokesperson Mischa Dunton said in May that the technical issue was resolved, and more than 80% of customers who were overcharged were reimbursed.
