Whole Foods Settles in Overcharging Case

Photo:kari Sullivan/Flickr/Creative Commons License

At the end of June, Whole Foods shoppers got some unwelcome news. After an investigation by the Los Angeles City Attorney's office, the popular supermarket chain agreed to pay an $800,000 settlement in response to allegations they artificially inflated prices for a wide variety of items. "We're taking action to assure consumers get what they pay for," Los Angeles City Attorney Mike Feuer told reporters. "No consumer should ever be overcharged by their local market."

The Los Angeles City Attorney's office, along with San Diego and Santa Monica's city attorneys, alleged in court that Whole Foods systematically inflated prices at stores throughout Southern California. Feuer's office said that there were three primary issues in terms of the alleged price inflation. Whole Foods allegedly lied about the weights of their packaged prepared items sold by the pound, charging customers for more food than they actually received. They also failed to tare the weight of boxes and containers when getting items from salad bars and buffets, and sold items like kebabs and prepared entrees by the piece instead of by weight -- which is a violation of California law.

Under the terms of the settlement, Whole Foods did not admit guilt but agreed to change prices at all of their 74 stores in California, and to pay almost $800,000 in penalties and costs. Whole Foods also has to appoint two liaisons to guarantee price accuracy in their California stores, and for random quarterly audits of all their California locations.

In an open letter to Whole Foods shoppers, chain executives Rob Twyman and Patrick Bradley said that "You may have heard about the now settled California case regarding weights and measures in our stores. We're disappointed that some customers who purchased weighed and measured items in our stores may have been slightly overcharged unintentionally. In some cases, customers were also undercharged. While close to 99% of the millions of transactions we processed during the evaluation period were found to be accurate, we are constantly committed to getting as close to 100-percent accuracy as possible."

A similar lawsuit was filed against Ralph's in 2012 which claimed customers were overcharged on weighted deli items. In that case, Ralph's opted for a similar $1.1 million settlement.

The Los Angeles lawsuit isn't the only legal trouble Whole Foods is facing in California, either. A class action lawsuit filed in Oakland earlier this year alleges the company's online form seeking job applicants' approval for criminal background checks is in violation of the Fair Credit Reporting Act. This follows a lawsuit by the State of California in late 2013 alleging the company sold products that contained unregistered pesticides.