Walmart faces lawsuit over misleading store prices

Walmart faces a lawsuit because the company says it often charges higher prices at checkout than what it sells on store shelves, costing consumers hundreds of millions of dollars a year, a federal appeals court ruled Wednesday.

Reversing a lower court judge’s ruling, the 7th U.S. Circuit Court of Appeals in Chicago ruled that consumers can try to prove in a proposed class action that the world’s largest retailer’s conduct was a deceptive “bait and switch” scheme that violated consumer protection laws in several states.

The court also rejected Walmart’s argument that presenting receipts after a purchase eliminated any unfairness resulting from incorrect shelf pricing.

District Judge David Hamilton wrote for a three-judge panel that it is “neither unreasonable nor fanciful” for consumers to believe Walmart charges the prices listed on its shelves.

Bentonville, Arkansas-based Walmart and its attorneys did not immediately respond to requests for comment. The named plaintiff, Yoram Kahn, is from the Cleveland area.

Consumer advocates said the price discrepancies were found in Florida, Illinois, Indiana, Maryland, New Jersey and New York, as well as North Carolina, even after a regulator there fined Walmart in 2022 for price-scanning errors.

Lawyers said most of the discrepancies were small — one Walmart store in New Jersey charged $3.64 for Crisco Pure Canola Oil when the shelf price was $3.12, while another charged $2.48 for Hershey’s chocolate syrup when the shelf price was $2.33 — but the discrepancies quickly added up.

Hamilton said consumers can’t be expected to always be vigilant at the checkout because they may be distracted by small children, tabloid headlines, pulling out wallets or bagging goods.

He added that it is not reasonable to force consumers to track shelf prices, either by heart or by writing them down in a notebook, while shopping.

“Who does this?” he wrote.

The appeals court returned the case to U.S. District Judge Sara Ellis in Chicago, who dismissed it in March 2023.

“We are pleased with the opinion and look forward to pursuing the rights of Walmart customers,” said Stanley Bernstein, a lawyer for the plaintiffs.

The case is Kahn v Walmart Inc, U.S. Court of Appeals for the 7th Circuit, No. 23-1751.

(Reporting by Stempel from New York, editing by Matthew Lewis)