Check your receipts! Home Depot must pay $2 million in compensation for false advertising and overpricing

Do you always check your receipts after every purchase? Otherwise, you may be overcharged without realizing it.

Last week, popular home improvement retailer Home Depot was ordered to pay a nearly $2 million settlement after being accused of false advertising and overpricing. The settlement follows a civil case brought by several California state attorneys general, who accused the company of unfair competition and deceptive pricing practices.

Excessive fees at the checkout

The lawsuit, filed in San Diego Superior Court, alleges that Home Depot customers were often charged more at checkout than the prices listed on shelf labels or on the items themselves. These discrepancies, known as “scanner violations,” resulted in customers paying higher prices than they expected.

Although Home Depot admitted no wrongdoing, it was ordered to pay a civil penalty of $1.7 million and an additional $277,251 to cover investigation costs and fund future consumer protection efforts. In addition to the fines, the company must implement a price accuracy program to prevent further pricing errors.

“Misleading advertising and unfair competition are serious offenses that undermine consumer confidence and distort the market,” said George Gascón, district attorney for Los Angeles County, stressing that retailers must continue to set accurate prices.

How common is overloading?

Overpricing at the checkout is more common than many shoppers realise. According to the UK’s Competition and Markets Authority (CMA), 60% of all pricing errors result in customers paying excessive prices. The CMA investigated the pricing practices of 139 grocery stores across England and Wales, including large supermarket chains and small independent retailers.

The results showed that pricing errors occurred in 4.2% of supermarkets, 14.4% of convenience stores, 5.6% of general stores and 7.8% of independent grocery stores. These errors were particularly common in fresh produce and promotional items, where discrepancies between advertised and actual prices at checkout were common.

George Lusty, interim chief executive of the CMA, commented: “We know how frustrating it can be to go to the checkout and find that the price is not the same as advertised. While many grocers adhere to the pricing rules, this needs to be consistent across all types of store.”

He added: “It is important that shoppers make well-informed decisions based on accurate information, especially when many are looking to save money.”

Comparison with Home Depot: Not the first of its kind

The settlement with Home Depot is not an isolated case in the world of retail. Other major chains have faced similar allegations of overcharging. In October 2022, Walmart was hit with a lawsuit alleging that the company “falsely inflated” the weight of certain items sold by weight, causing customers to pay more than they should. Although Walmart denied the allegations, the case ended in a multimillion-dollar settlement.

These incidents highlight a widespread problem in retail: errors in pricing and product weight can result in consumers paying more than intended.

How to avoid excessive fees

Experts recommend taking some simple precautions to protect yourself from overpricing. Most importantly, always double-check that the price on an item’s shelf label or sign matches the price at checkout. If there’s a discrepancy, notify a manager or salesperson immediately.

Most stores have scales in the appropriate departments for items sold by weight, such as fruits and vegetables. Use these scales to weigh your items before you go to the checkout. If you are using a self-checkout, make sure the checkout scale is at zero before your item is weighed. If you notice any inaccuracies, address the issue with store staff immediately.

If the edges of the scale in the store rub against the machine, it can cause inaccurate readings, so it’s a good idea to check the edges of the scale before weighing your items. In many cases, even if a clearance sign is still displayed, the retailer is required to honor the price, even if a clearance offer has expired.

Different regions have different policies regarding overpricing. In Wisconsin, for example, customers who overpay are entitled to a refund for the difference between the advertised price and the actual price charged. Some retailers even offer the overpaid item for free as compensation.

What’s next for Home Depot?

The settlement is an important step in protecting consumers from unfair practices, but the long-term impact remains to be seen. Home Depot’s price accuracy program will be closely monitored, and the company will likely face ongoing scrutiny to ensure compliance.

For now, the message to shoppers is clear: always check your receipts because you never know if you’re being overcharged.