Albertsons, Vons and their affiliates have agreed to pay nearly $4 million to settle a civil lawsuit filed by seven California district attorneys alleging false advertising, excessive pricing and unfair competition.
The settlement agreement, which was finalized Sept. 26 by a judge in Marin County Superior Court, Sheila Lichtblau, will allocate $3.21 million in civil penalties over the false advertising issues that led to customers being overcharged for grocery products. Under the terms of the settlement, district attorney offices in Alameda, Los Angeles, Marin, Riverside, San Diego, Sonoma and Ventura counties will each receive $459,000.
A number of agencies will also receive nearly $650,000 to cover investigative costs related to the investigation of the supermarkets’ practices, according to the settlement.
“False advertising preys on consumers, who are already facing rising costs, and unfairly disadvantages companies that play by the rules,” Los Angeles County District Attorney George Gascón said in a prepared statement. “This kind of corporate conduct is especially egregious when it comes to essential groceries, as Californians rely on accurate advertised prices to budget food for their families.”
The office’s Consumer Protection Division aims to protect consumers from corporate policies that don’t comply with California law, Gascón said.
The complaint filed by the district attorneys argued that Albertsons and Vons illegally charged consumers prices that exceeded their lowest advertised prices, according to the Los Angeles County District Attorney’s Office. In addition, the investigation concluded that Albertsons sold products that contained inaccurate weights on their labels, the office reported.
“Some items sold by weight such as produce, meats, baked goods and other items had less product in the package than was displayed on the package label,” the District Attorney’s Office said. “For those items, a grocer may only charge for the product’s actual weight; the packaging is not included in the overall weight.”
In agreeing to the settlement, the company did not acknowledge any negligence. But Albertsons, the parent company of Vons, Pavilions and Safeway, said in a statement emailed to the Southern California Record that it remains committed to quickly correcting any price discrepancies and charging consumers only their lowest advertised prices for products.
“We have taken steps to ensure our price accuracy guarantee is more visible to customers by posting signage at multiple locations at the front of our stores,” the company said. “We have conducted additional comprehensive training for associates to reinforce the importance of price accuracy and customer transparency. Additionally, we have enhanced price tracking systems to better ensure real-time accuracy at stores.”
The settlement commits the company to an independent audit to ensure that product prices are in line with advertisements.
“Any customers who may have been inadvertently charged a higher price are eligible to receive a gift card or the item for free as outlined under (the) Albertsons, Vons, Pavilions price accuracy guarantee policy, which can be found posted in stores,” the statement says.
If the company overcharges on an item that is $5 or less, it will give the customer that item for free. And if overcharges involve a product worth more than $5, customers will receive a $5 gift card and then will be charged the accurate price for the item.
The court concluded it would not be possible to provide direct reimbursements to customers who may have been unknowingly overcharged by the grocery giant.