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Walgreens Settles Scanner Suit for $1.4 Million

Four counties reach an agreement with retailer and pharmacy accused of false advertising and overcharging consumers.

As part of a settlement reached between Walgreens and top Bay Area prosecutors consumers could get an item for free or their money back.

The agreement announced Wednesday by the Santa Clara County District Attorney’s Office in conjunction with San Mateo, Contra Costa and Santa Cruz counties, requires the retailer and pharmacy to pay $1.425 million for violation of California's truthful advertising law. The suit claimed that Walgreens had overcharged consumers by failing, on multiple occasions, to ensure prices on its store shelves matched the prices charged at the cash register.

According to a press release, Walgreens had also advertised discounted prices for using "Register Reward" coupons without clearly disclosing that the coupons required another purchase in order to benefit from the savings.

"Consumers have a right to expect that products will be accurately priced," said Santa Clara County District Attorney Jeff Rosen. "They should be protected from careless or intentional pricing errors. Our office brings actions such as this to
assure that merchants have policies and procedures in place to fulfill their obligations to sell merchandise at the advertised prices.”

There are 54 Walgreens in Santa Clara County, two of which are in Los Gatos.

The DA's office learned of the discrepancy from consumer complaints made to the local Department of Weights and Measures offices, which conducts regular inspections of scanners in retail establishments statewide, explained Santa Clara County Deputy District Attorney Martha J. Donohoe with the Consumer Protections Unit.

"It may be either that the shelf tag hasn’t been changed, but the price has been changed in the computer," Donohoe said. This suit will "work to ensure that shelf tags are removed from shelf and the sale items are updated on the computer."

Donohue added that sometimes consumers do not check their receipts after their item has been rung up. "The price at the registrar has to be the lowest price offered," she said.

As a result of the lawsuit, Walgreens has 60 days to offer a Scanner Price Guarantee to compensate consumers who find price discrepancies at the time of check out. According to the DA, the terms of the Scanner Price Guarantee will be posted in every Walgreens store in California for three years.

If a consumer notifies the cashier that the price rung up is more than the lowest advertised price for an item, the consumer will receive either a $5 deduction or
a $5 merchandise card. If the item is under $5, the customer can have the item for free.

Walgreens did not admit wrongdoing in this case. The company cooperated with prosecutors during the investigation. The case was investigated by state and
Department of Weights and Measures.

"Walgreens have many things that they are doing to make sure that things are properly charged at in the store," said Donohoe. "For the consumer if they aren't charged properly it’s an immediate recourse.

"It’s about getting the public to police the injunction and make sure Walgreen’s is acting properly," Donohoe said.

According to Donohoe the money will be split between the four counties that originally brought the suit and Weights and Measures departments in 27 locales that helped in the investigation.  The counties will use their shares to fund consumer protection activities and the weights and measures departments will use theirs to recoup the costs of the investigation.

The DA reminds consumers to always check receipts to verify that they are charged the correct price for an item. Consumers in Santa Clara County who are the victim of a price overcharge should call the Scanner Hotline toll free at 1-866-SCANNER (722-6637).

Additional reporting by JB Davis.

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