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Whole Foods or Whole Paycheck? – Systemic Overcharging in the Grocer’s New York Stores

Published onJul 15, 2015
Whole Foods or Whole Paycheck? – Systemic Overcharging in the Grocer’s New York Stores

Even though many people enjoy Whole Foods’ hot bar and fresh guacamole, it seems the grocery store chain has been aptly nicknamed “Whole Paycheck.”  Recently, the Department of Consumer Affairs (“DCA”) investigated the New York supermarkets, and the agency found that 80 types of prepackaged products were mislabeled by weight.  The agency is now expanding its investigation after discovering overcharging that ranged from 80 cents for a package of panko to $14.85 for coconut shrimp.  Most of the products also did not meet the U.S. Department of Commerce’s standard for the maximum amount a package can deviate from its actual weight.

According to the DCA findings, the alleged number of violations is in the thousands.  At first, Whole Foods denied the allegations and insisted that the claims were overreaching.  However, DCA Commissioner Julie Menin said that the agency’s legal team met several times with Whole Foods to discuss the violations and presented the executives with evidence to support the accusations.  The DCA plans to hold Whole Foods accountable for city and state law violations.  The fine for mislabeling can be as much as $950 for the first violation and up to $1,700 for additional discrepancies.  The inspectors called this “the worst case of mislabeling they have seen in their careers.”  Joseph Bassolino, a New York City Whole Foods shopper, filed the first lawsuit against the company in State Supreme Court seeking damages for mislabeled products he purchased the last three years, and he hopes to make it a class action.

Whole Foods’ Response

A week after the DCA released its findings, co-CEOs Walter Robb and John Mackey posted a YouTube video to apologize to loyal shoppers.  “Straight up, we made some mistakes,” Walter Robb said.  However, the executives were not willing to take all of the blame. John Mackey said there was only a “very small percentage” of weighing errors for items like sandwiches, fresh juices, and cut fruit.  Walter Robb insisted that the errors were unintentional and inadvertent because of the company’s “hands-on approach to bringing you fresh food.”  The company’s blog stated that since many fresh products are packaged in stores instead of in factories, there will be some unintentional human errors in order “to deliver the freshest products to customers.”  Whole Foods explained that the errors could be the result of incorrectly calibrated scales or because of moisture loss in the products over time.  In the YouTube apology video, the executives also outlined steps the company will take to guarantee pricing accuracy in the New York stores.  The organization will use an outside auditing service to report the company’s progress in 45 days.  The co-CEOs also promised customers that if something seems mislabeled, a cashier can weigh it, and if the product’s weight was overstated, the customer can have the item for free.

Whole Foods Market in the Lower East Side by David Shankbone

History Repeating Itself

Even though the company’s goal is “100 percent price accuracy,” the apology is questionable since Whole Foods recently paid fines for a similar situation in its California stores.  In 2012, city attorneys for Santa Monica, Los Angeles, and San Diego brought a civil consumer protection case on behalf of California residents for overcharging.  The pricing inaccuracies violated consumer protection laws related to false advertising and unfair competition.  The case settled last year, and Whole Foods agreed to pay $800,000 in penalties for pricing errors.  The company also agreed to a pricing accuracy effort in the California stores that included state compliance coordinators, employees at each store to oversee pricing accuracy, and random store audits.

What You Can Do

In an article discussing the investigation, the DCA included tips for shopping at supermarkets to hold stores accountable for pricing accuracy.  The agency advised consumers to review receipts to ensure the shoppers were charged the advertised price for the quantity of goods.  Shoppers should also check the scales for an updated DCA sticker, which certifies that it was recently inspected.  Shoppers can also weigh packaged goods themselves to verify the price for the weight of the item.  It is also important to deduct the weight of the packaging or container.

*Casey Fidler is a second year law student at Wake Forest University School of Law.  She holds a Bachelor of Arts in Journalism and Political Science from the University of North Carolina at Chapel Hill. 

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