Dive Brief:
- Whole Foods Market just can't seem to shake its "whole paycheck" moniker as it is now facing an investigation in New York City that has been reportedly called the "worst case of overcharges," according to NYC Commissioner Julie Menin.
- The probe comes as a result of a sting operation conducted by the New York Department of Consumer Affairs which examined the accuracy of pre-packaged products' labeled weight at 120 grocery stores across the city. Out of these 120 stores, 77% of them must now deal with the consequences of one or more violations. Whole Foods was the worst offender with all of its 80 tested products found to be labeled with incorrect weights, including an additional $14.84 charged for a package of coconut shrimp.
- Whole Foods is "vigorously defending" itself in light of these accusations, according to NY Daily News.
Dive Insight:
This isn't the only case in which Whole Foods has been targeted for overcharging its customers. In 2014, Whole Foods was forced to pay $800,000 in penalties following a year-long investigation of accusations that the health foods retailer overcharged California customers. The accusations against Whole Foods included that the company "charged more than advertised for a wide range of food products" and was "failing to deduct the weight of containers when ringing up fresh food, putting smaller amounts into packages than the weight stated on the label, and selling items by the piece instead of by the pound, as required by law," according to a statement from the Santa Monica city attorney's office.
Whole Foods reportedly cooperated with the investigation "to ensure accuracy and transparency in everything we do," Whole Foods said, as reported by the Los Angeles Times. Based on an internal review, Whole Foods said it sold items with 98% accuracy for pricing on weighed and measured products but that the company would "refine and implement additional processes to minimize such errors going forward."
Whole Foods hasn't been the only retailer charged in this type of overcharging case. Just earlier this year, Target reached a $4 million settlement deal when it was accused of overcharging on products by "misrepresenting the weight of its own prepackaged food items," which affected prices posted in the aisles, Fox 5 reported.
Mislabeling and subsequent overcharging is not always the fault of the retailer, as the manufacturer plays a role in pre-packaged foods. "Because of the volume of product that gets produced unintentional mistakes are made. […] If a product is delivered to a store pre-packed and pre-sealed and pre-labeled the retailer does not have control over the packaging and weighting. It’s not the retailer — it’s the manufacturer that packed the product," according to Jay Peltz, general counsel and vice president of government relations for the Food Industry Alliance of New York.