November 22, 2005
NEWLY RELEASED PRICING STUDIES FIND WAL-MART CHARGING CUSTOMERS WRONG PRICE IN FOUR STATES
WakeUpWalMart.com Supporters to Distribute 1 Million ‘Wal-Mart Consumer Alert’ Flyers Beginning on ‘Black Friday’
Washington, D.C. – Today, WakeUpWalMart.com and the National Consumers League sent a joint letter to Attorneys General in all 50 states calling on them to launch a full-scale investigation into Wal-Mart’s pricing practices based on the findings of two newly released studies conducted by the University of Illinois-Chicago Center for Urban Economic Development and the University of California-Berkeley.
The two studies examined the pricing accuracy, the difference between the shelf-price and the cash register price, at Wal-Mart stores in California, Illinois, Michigan and Indiana and concluded the pricing errors at Wal-Mart stores in these 4 states failed to meet the federal standards set by the National Institute for Standards and Technology (NIST). The federal standard, set by the NIST, requires no more than 2 out 100 randomly selected items from any one store may be incorrectly priced.
The study found that almost 85% of the Wal-Mart stores in the IL, MI & IN study failed to meet the federal standard for pricing errors. In California, the results were worse with almost 87% of Wal-Mart stores failing to meet the federal standard for pricing accuracy.
In Illinois, Indiana and Michigan, Wal-Mart charged the wrong price for 6.4% of the items purchased statewide for the survey, and in California, 8.3% of the items purchased statewide.
“”Wal-Mart customers beware. Consumers shouldn’t have to gamble with the price they pay at Wal-Mart stores. Wal-Mart has been charging customers the wrong price by failing to meet the federal pricing standard in four of the largest states in the nation. Wal-Mart customers have a right to know whether or not they are paying the wrong price,”” said Paul Blank, campaign director for WakeUpWalMart.com.
In the letter to the Attorneys General, the National Consumers League and WakeUpWalMart.com suggest ways Wal-Mart could correct this potential pricing problem, including: requiring Wal-Mart to post notices at each register warning customers that they may be overcharged; requiring Wal-Mart to hire enough employees to accurately price merchandise; requiring each Wal-Mart store to hire an employee solely responsible to ensure accurate pricing; and require item pricing in its stores.
“”On behalf of all consumers, especially as we enter the Holiday shopping season, we are calling on every state to immediately investigate Wal-Mart’s pricing and scanner practices and to take appropriate action to fix this potential problem. At least in the four states studied, Wal-Mart may need to change its slogan to ‘Sometimes Low Prices’ if you are lucky,”” added Blank.
Both studies came to the following conclusion, “”A majority of Wal-Mart stores tested in this evaluation of price accuracy demonstrated errors in pricing that exceeded federally accepted standards for large retail establishments.”” In fact, 63% of the surveyed stores in California were exceeding the federal standard just based on their overcharging of customers. Furthermore, accounting for the margin of error, between 75% and 94% of Wal-Mart stores in the 3 Midwest states are failing to meet federal standards for price accuracy.
The results of the studies raise serious concerns nationally given Wal-Mart’s top-down, centralized control by its corporate headquarters in Bentonville, AR.
In addition to releasing the study, supporters of WakeUpWalMart.com, America’s largest grassroots campaign to change a corporation with over 130,000 supporters, will be mobilizing an unprecedented grassroots campaign to inform consumers about Wal-Mart’s pricing errors. Beginning on November 25th, the traditional kick-off to the Holiday shopping season, supporters will be taking part in a national consumer alert campaign with actions in 36 states and 102 cities. WakeUpWalMart.com plans to distribute more than 1 million ‘Wal-Mart Consumer Alert’ flyers and launch a multimedia effort to inform American consumers about the pricing errors found in these four states.
Statement by Illinois Attorney General Lisa Madigan:
“”I am very concerned about the scanning error rate for Wal-Mart as reported in the study by the University of Illinois at Chicago. My staff and I are taking a close look at these findings,”” said Illinois Attorney General Lisa Madigan. “”As we enter the busiest shopping season of the year, this study is a glaring reminder that all consumers must pay close attention to the pricing screen at checkout. If you think you have been overcharged, you should complain immediately to store personnel. Consumers may also complain directly to my office at 1-800-243-0618.””
Statement by Connecticut Attorney General Richard Blumenthal
“”This data shows serious discrepancies between the prices posted and the amounts actually charged – meriting prompt investigation -because Wal-Mart has a legal obligation to be always accurate, not always low,”” Connecticut Attorney General Richard Blumenthal said. “”Nothing is more fundamental to fair pricing than keeping promises about prices. Consumers should be spared a sweepstakes system when they come to the cash register. They deserve reliable, rock-solid price guarantees. The price they are given should be the price they are charged.
“”I will take appropriate action to protect consumers and assure the integrity of Wal-Mart’s prices if my investigation uncovers unacceptable price inaccuracies in Connecticut.””