Walmart told their receipt defense is not OK after shopper says he fell for ‘bait and switch’ tactic and was overcharged

AS Walmart is set to again face a lawsuit claiming the retailer misled shoppers about prices, a court has ruled that the company cannot use a defense involving printed receipts.

The class action lawsuit, lead by plaintiff Yoram Kahn, has accused Walmart of overcharging shoppers with “bait and switch” tactics by having some prices listed on shelves lower than what is charged at checkout.

Getty

Getty

Getty

Kahn originally sued the company in August 2022.

At the time, he claimed he was charged $1.89 extra than what had been advertised.

The case was originally thrown out, however, the 7th US Circuit Court of Appeals overturned the ruling on Wednesday.

Now, Kahn and other shoppers have a second chance to prove that Walmart used “deceptive and unfair pricing practices” they claim disadvantaged customers and violated consumer protection laws in the state of Illinois .

The ruling admitted that while the extra charges might be small when discussed individually, Kahn alleged that pricing discrepancies can add up to “hundreds of millions of dollars” annually.

Not only that, Khan has claimed that Walmart knows of the issue.

“Kahn alleges that Walmart is aware of these discrepancies between shelf prices and register prices and that its unfair and deceptive pricing practices are pervasive and continuous,” the ruling reads.

REJECTED DEFENSE

In the original dismissal of the case, the lower court appeared to accept a defense from Walmart that involved printed receipts.

US District Judge Sara Ellis noted in her ruling at the time that because Kahn received a receipt after his purchase that showed the overpayment, there was nothing deceptive about the pricing increase.

“Kahn could, and indeed did, use [his] receipt to compare the prices Walmart charged him with the advertised shelf pricing,” Ellis said in the dismissal.

“This comparison revealed the discrepancy and dispelled any potential deception.”

However, this argument was rejected on Wednesday with the federal appeals court saying it was a matter of law.

“We reject the theory that providing a customer with a receipt after payment stating the actual price charged is sufficient, at least as a matter of law, to dispel any potential deception or unfairness caused by an inaccurate shelf price,” the ruling reads .

The court went on to say that providing a receipt does not necessarily mean there was no deception in pricing inaccuracies because it was supplied after payment was complete.

What is the 'bait and switch' tatic?

Bait-and-switch pricing schemes are considered to be incidents where consumers are unable to “reasonably” avoid injures, such as financial losses, that occur due to higher prices or search costs.

To avoid the injures in the scheme, consumers must either make an uninformed decision to spend extensive time searching all necessary information.

In the lawsuit against Walmart , the plaintiffs have accused the company of this scheme saying prices of goods were deceptively marked lower on shelves than what they rang up as when checking out.

Circuit Judge David Hamilton expanded upon this in his reasoning adding that if the lower court’s ruling remained, it would require customers to take on unreasonable efforts to protect themselves from deceptive prices.

For example, consumers would be forced to keep track of every shelf item’s price when shopping.

“As the district court acknowledged, a receipt by itself will not dispel deception created by inaccurate shelf prices,” Hamilton said.

“Rather, only the plaintiff’s comparison of the prices actually charged at the register against the advertised shelf pricing dispelled the potential deception.”

‘HONEST MISTAKES’

The lawsuit alleges that Walmart has been stealing hundreds of millions of dollars from shoppers in these pricing discrepancies.

The plaintiffs attorney, Stanley Bernstein, claims he has evidence of these across the country in states like Florida, Illinois, Indiana, Maryland, New Jersey, New York, and North Carolina.

Walmart has denied any wrongdoing, saying in a brief filing that it is “virtually impossible” to ensure prices on the shelf and prices at checkout are the same all the time.

“Neither the law nor industry standard require perfection,” the retailer said.

Walmart's Lawsuit

Walmart is being accused of 'deceptive' price tactics in a lawsuit.

Ohio man, Yoram Kahn, a shopper who filed a class action lawsuit against Walmart in August 2022, claims to have paid $2.28 for a jar of salsa, not including tax, that was advertised on the store shelf as only costing $2.00. In the same visit, he paid $1.88 for a Kit-Kat bar that was listed at $1.64.

Although these discrepancies may seem minor, and many customers wouldn’t notice because of sales taxes, the increased costs resulted in markups of 9% to 15%.

This would mean, If found to be true, that Walmart has been skimming hundreds of millions of dollars from consumers in hidden mark-ups, according to the lawsuit.

Kahn claims that Walmart’s practice of charging higher prices at checkout than advertised on shelves constitutes a fraudulent “bait-and-switch” tactic, violating consumer protection laws.

“Any contrary position would in effect hold retailers strictly liable any time a shelf price fails to match a purchase price, no matter the reason.”

Daniel Blouin, an attorney representing Walmart, has also said that any observed overcharges are “honest mistakes.”

“That’s the underlying point that they’re trying to make throughout this entire lawsuit,” Blouin said in January.

“That even in a simple situation where an honest mistake is made, [Walmart] should be held liable.”

Walmart did not immediately respond to The U.S. Sun’s request for comment.