Whole Foods has agreed to pay $500,000 after being accused of ripping off customers in New York City.
The settlement was reached on Monday, December 28, on the heels of an investigation conducted by New York’s Department of Consumer Affairs (DCA).
Following an analysis including 80 varieties of prepackaged foods, such as sandwiches, fruit salad and party platters, DCA identified thousands of irregularities.
More precisely, it was determined that approximately 75% of around 120 supermarkets included in the research had wrongly priced their products, forcing customers to pay more than they should’ve.
For example, veggie platters had cost around $2.5 more, berries had been overpriced by $1.15, while chicken fingers had their price inflated by around $4.13.
In addition, all the food items verified in this research had been erroneously weighed, around 89% of them breaching net weight labeling regulations imposed by the government.
A probe was launched in June in order to fully assess the scope of this swindle, and commissioner Julie Menin came to the conclusion that this was the most serious and far-reaching mislabeling fraud reported in recent years.
Based on these findings, Whole Foods was initially required to pay $1.5 million, for the losses experienced by NYC residents.
Considering the penalty excessively steep and insisting that no overcharging had been committed, company representatives discontinued all negotiations, but now it appears a new settlement has been reached, through which a fine of $500,000 will have to be paid.
Moreover, as DCA officials have explained, the supermarket chain headquartered in Austin, Texas will be subjected to audits on a quarterly basis, involving a minimum of 50 food items from 10 NYC department stores. This way, it is hoped that the practice of pricing products erroneously, to the detriment of customers, will be put to an end.
Another measure demanded by the agency is that staff will have to weigh each prepackaged product in advance, before placing its price label.
Although feds have announced these new rules giving the impression that Whole Foods has actually agreed to follow them, company representatives are now claiming that the settlement has been presented inaccurately.
In their opinion, there is no need for such procedures, given that similar, even stricter guidelines are already being followed, such as audits by independent consultants, and full refunds for customers proving that a product has been incorrectly priced.
According to them, there was no real proof that costs had been inflated intentionally or malevolently, on an extensive basis. In fact, some products were actually underpriced, allowing customers to pay less for the very same value.
As explained by the organic food retailers, the only reason why the $500,000 fine was eventually accepted was so that the company can move away from this controversy, and devote its attention once again to its clients, ensuring that they can enjoy its services as before.
Apparently, once the allegations first surfaced, customer confidence experienced a decline, and the chain’s reputation was severely affected.
The scandal even reached the point where the business was nicknamed “Whole Paycheck” instead, so as to emphasize its shady practices of making customers shell out disproportionate amounts of money.
This isn’t however the first time that Whole Foods has been accused of surcharging buyers: in 2014, following similar revelations made by inspectors in California, the company was slapped with a $800,000 penalty, to be paid to the cities of San Diego, Los Angeles and Santa Monica.
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