Whole Foods is paying up to settle accusations of overcharging — though not as much as New York City originally demanded.
Whole Foods and New York City’s Department of Consumer Affairs announced an agreement on Monday, settling the DCA’s investigation of the supermarket’s mislabeling and overcharging of pre-packaged products. As a result of the settlement, Whole Foods is paying $500,000 and expanding its policies to prevent mislabeling and incorrect pricing.
“After discovering the troubling and repeated mislabeling of pre-packaged goods at Whole Foods last year, we are happy to have reached an agreement with Whole Foods that will help to ensure New Yorkers are better protected from overcharging,” DCA Commissioner Julie Menin said in a statement.
The DCA says that as part of the settlement Whole Foods will be required to conduct in-store audits, as well as implement policies to prevent future instances of mislabeling or overcharging, such as requiring employees to individually weigh each package instead of estimating weights.
While the two organisations have reached an agreement, Whole Foods has protested how DCA framed the settlement.
“Whole Foods Market worked closely with the New York City Department of Consumer Affairs (DCA) over the last several months to reach an agreement that is in the best interest of the people of the City of New York and our stakeholders,” reads the grocery chain’s statement. “Unfortunately the DCA has misrepresented this agreement.”
While the DCA found numerous instances overcharging, Whole Foods highlights the fact that the department’s investigation revealed Whole Foods had no intent to deceive or intentionally overcharge customers.
Additionally, Whole Foods says it had preexisting pricing and weights programs in place that go “above and beyond the DCA’s requirements,” including a guarantee that gives customers a full refund on any mispriced items.
The company told Business Insider that store audits and trainings have long been part of the company’s efforts to ensure price accuracy and transparency.
However, some new policies, such as requiring employees to individually weigh each package, came out of the agreement with the DCA.
“There was no evidence of systematic or intentional misconduct by anyone in the Northeast region or the rest of the company,” reads the statement. “While WFM refused to consider the DCA’s initial demands of $1.5 million, we agreed to $500,000 in order to put this issue behind us so that we can continue to focus our attention on providing our New York City customers with the highest level of quality and service.”
The DCA launched its investigation in June, after a sting operation revealed more than 80 instances of inaccurate labelling, many of which resulted in overcharging customers. The overcharging scandal was particularly bad press for Whole Foods as more bargain-friendly players such as Kroger and Walmart expand into the organic market.
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