Scanner Errors Cost Albertsons Stiff Fine
A judge has ordered Albertsons supermarkets to pay $1.85 million to settle accusations that the chain’s computer scanners overcharged customers across California for groceries.
The settlement came after prosecutors in 15 counties prepared a civil lawsuit accusing Albertsons of false advertising and unfair business practices.
Between August 1999 and December 2002, inspectors across the state documented 335 overcharges at 157 of the chain’s stores. The average overcharge per visit totaled 93 cents, officials said, with inspectors purchasing a wide variety of products.
Authorities said they believe the overcharges occurred because price changes were not updated, not because the chain purposely tried to skim extra money from customers.
They said Albertsons’ situation is part of a larger problem of retailers’ failure to ensure that sale prices listed on products match the prices picked up by the check-out scanners.
“For whatever reason, there’s not enough care paid to have shelf prices match what’s in the computer system,” at stores, said Al Shelden, supervising deputy for the state attorney general’s office.
The investigation began in 1999 when officials in San Luis Obispo and San Diego sent word to other jurisdictions that they had noticed a high incidence of overcharges at Albertsons stores.
San Diego Deputy Dist. Atty. Tricia Pummill said inspectors were initially willing to grant Albertsons some leeway because, at the time, the company had just completed a merger with the Lucky supermarket chain.
“Inspectors recognize that when a business goes through something like [a merger], it’s tumultuous, but it wasn’t getting corrected with any kind of speed,” Pummill said.
Continued overcharging at Albertsons stores prompted authorities to get local prosecutors and the state attorney general’s office involved. In the end, 15 counties joined in the probe, including Orange, Riverside, Santa Barbara and Ventura. A San Diego judge on Friday agreed to the settlement, in which the prosecutors agreed not to file their civil suit.
“Reports were coming in from all over involving Albertsons,” Shelden said.
Albertsons spokeswoman Lilia Rodriguez said most of the violations had occurred shortly after the merger. The company has since worked to improve pricing accuracy, she said, including repositioning store registers so customers can see the prices they are being charged.
Under terms of the settlement, Albertsons must also hire a full-time scanner coordinator for each of its nearly 500 California stores whose sole duty will be to ensure pricing accuracy.
It must also institute a policy for the next five years in which any item for which the scanner overcharges must be offered to the customer for free.
Rodriguez said the mandated giveaway program duplicates a long-standing Albertsons policy of not charging customers for items that scan higher than the marked price.
Rodriguez said the company’s goal is 100% pricing accuracy, but achieving such perfection can be elusive, according to Jeff Humphreys, deputy director of Los Angeles County’s Agricultural Commissioner/Weights and Measures Department.
Although $20,000 of the penalty against Albertsons will be used to reimburse Los Angeles County for the cost of 100 inspections used in compiling the case, the county has already inspected Albertsons stores 36 times in 2003 and found 10 more instances of overcharging.
That is not an unusually high rate of violations for a major retailer, Humphreys said. “I don’t think they’re currently any worse than the rest of the grocery industry.”
In less than a year after boosting its cadre of full-time inspectors from one to 12, Los Angeles County has documented more than 900 overcharges. That is a rate of nearly one overcharge for every four stores visited.
