Have you ever wondered when buying grocery items by the pound, if you’re also paying for the weight of the packaging? Well, you shouldn’t be. But the city of Los Angeles says a local chain has been charging customers that way repeatedly – so maybe a million-dollar penalty will get the store’s attention.
Los Angeles-based Ralphs, a subsidiary of Kroger, will pay $1.1 million in fines and restitution as part of a settlement with the City Attorney’s Office that was announced today. Ralphs was accused of “repeatedly overcharging customers on deli and other weighed food products, and for failing to deduct the weight of packaging on those items.” In an investigation begun in 2010, city inspectors who visited several Ralphs stores, discovered a number of cases in which Ralphs “charged an amount that was more than the price posted or quoted, and also sold items in a smaller quantity than represented.” Inspectors reported that not only were they charged for the weight of the packaging on items like self-service salads and fried chicken, but even for the weight of the ice in some seafood products.
This is the fourth time in recent years that Ralphs has had to pay fines for overcharging its customers, though it’s never had to pay nearly this much. It was fined $6,500 in 2008, $10,400 in 2009 and $67,600 in 2011. “We’ll be really happy if they learn their lesson and never rip off their customers again,” the Deputy City Attorney said the last time Ralphs was fined. Apparently that lesson went unlearned.
Ralphs’ defense? Weighing and pricing stuff is hard! “Each Ralphs Grocery Store has approximately 50,000 individual items, with 9,000 price changes each week,” the company said in a statement today. “Our industry faces these challenges every day,” a store spokesperson said the last time they were fined in 2011. “There’s absolutely no malicious intent in this situation whatsoever.” Ralphs admitted no wrongdoing in agreeing to today’s settlement, calling it a “business decision” intended to “put this behind us.” The company insists it is “industry-leading and will continue to be when it comes to providing our customers accurate pricing and precise labeling.”
Not quite, says the City Attorney’s Office. “During these tough times, shoppers must be protected from misleading and unfair pricing practices, especially when they’re buying groceries for their families,” Los Angeles City Attorney Carmen Trutanich said in a statement. “Ralphs and other big companies will be called out and held accountable when they overcharge and short-weight consumers. The City and our residents will not tolerate such bad corporate behavior.”
Under the terms of the settlement, Ralphs will have to maintain a pricing compliance program and conduct self-audits for the next four years. It will also pay $1 million in civil penalties to the City of Los Angeles, and $100,000 in restitution to the Los Angeles Regional Food Bank. Customers who got overcharged will get nothing, except perhaps some assurance that they won’t be overcharged again.
The City Attorney’s Office says it’s customers who are the real victims. “Ralphs is taking money out of their customers’ pockets,” the Deputy City Attorney said last year. “It might just be 95 cents, but if you add that up over the number of stores they have, times the number of times they sell that item, times 365 days a days a year, this becomes a huge ripoff.”
“There is nothing misleading nor unfair (about) Ralphs’ pricing,” Ralphs insists. “We look forward to continuing to serve our customers throughout Southern California.” This time, the city hopes, without anyone’s thumb on the scale.