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Whole Foods (WFM) fined $800,000 for overcharging

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(Read caption) Whole Foods Market will pay an $800,000 penalty in California for charging customers more for goods than what was advertised.

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Customers at Whole Foods expect to pay a lot for groceries – the chain didn't get the nickname "Whole Paycheck" by accident. But a recent investigation in California found that the premium grocery store was actually overcharging customers illegally.

Whole Foods Market is paying an $800,000 penalty for repeatedly charging customers more than the advertised price in its California stores. After a one year investigation, state and county inspectors found that the supermarket failed to deduct the wight of containers when ringing up self-serve foods, gave less weight than the amount stated on the label of packaged products, and sold items by the piece instead of by the pound, when the latter is required by law.

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"What brought this [investigation] about was a lack of consistency throughout the state,"Santa Monica Deputy City Attorney Adam Radinsky said in an e-mailed press statement. "Cashiers were using inconsistent methods to measure goods and [measurements] were not always accurate. It led to a number of problems."

Mr. Radinsky said customers have a right to accurate pricing. "By adding the weight of containers and packaging, especially on higher-priced, per-pound items like seafood and meats and even prepared food, the extra charges can add up fast, and yet be hidden from consumers," he said.

In an e-mail statement to the Monitor, Whole Foods Market, based in Austin, Texas, said it takes its obligations to customers very seriously and "strives to ensure accuracy and transparency in everything [it does]." 

"We cooperated with the city attorneys throughout the process, and based on a review of our own records and a sampling of inspection reports from various city and county inspectors throughout California, our pricing on weighed and measured items was accurate 98 percent of the time," the company said. "While we realize that human error is always possible, we will continue to refine and implement additional processes to minimize such errors going forward."

The Los Angeles County Superior Court put a five year injunction on the 74 Whole Foods Markets in California. Terms of the injunction include appointing two state officials to oversee pricing accuracy, a designated employee at every store to oversee pricing accuracy, and conducting four random audits a year to ensure weight is being deducted for all fresh food containers. 

Whole Foods Market isn't the first store to be charged for overcharging customers in this manner. Ralph's, Walmart, Fresh & Easy, Sears, Kohl's, and Best Buy have all been charged with similar violations.

"This is a problem that has come up in other grocery stores," Mr. Radinsky said. "Consumers should always pay close attention to their purchases and make sure that the store deducts the weight of all packaging and containers."