Walmart facing lawsuit over 'deceptive pricing practices' and overcharging customers - here's what you need to know

Walmart must go to court to answer claims that says it used deception to overcharge customers - which could result in a multi-million payout.

The world's biggest retailer often charges higher prices at the register than it posts on store shelves, the lawsuit claims.

The practice is costing consumers hundreds of millions of dollars a year, it is claimed.

Walmart tried to get the claim thrown out but a federal appeals court ruled on Wednesday that it must answer accusations that it overcharged customers with 'deceptive and unfair pricing practices.'

Plaintiff Yoram Kahn says that - even though the discrepancies might be just 52 cents or 15 cents in two examples - they 'add up to hundreds of millions of dollars each year.'

The case will now be heard later this year and if Walmart loses it will have to pay out compensation. At that point, the court will advise other Walmart customers how to claim money.

Another overcharging class action lawsuit against Walmart was settled this year - with the retailer forced to pay out $45 million to customers.

Lawyers Kahn and other consumers said they found price discrepancies in Florida, Illinois, Indiana, Maryland, New Jersey and New York.

They also found them in North Carolina - even after a regulator there fined Walmart in 2022 for price-scanning errors.

Reversing a lower court judge, the 7th US Circuit Court of Appeals in Chicago said consumers could try to prove in their proposed class action that the conduct of Walmart was a fraudulent 'bait-and-switch' that violated several states' consumer protection laws.

It also rejected Walmart's argument that providing receipts after purchases negated any unfairness caused by inaccurate shelf prices.

Circuit Judge David Hamilton wrote for a three-judge panel that it was 'neither unreasonable nor fanciful' for consumers to believe Walmart would charge the prices displayed on shelves.

Lawyers for the consumers highlighted some discrepancies. One Walmart in New Jersey charged $3.64 for Crisco Pure Canola Oil versus the $3.12 shelf price, while another charged $2.48 for Hershey's Chocolate Syrup versus the $2.33 shelf price.

They said these added up fast.

Hamilton said consumers cannot be expected to always keep an eagle eye at checkout, where they might be distracted by young children, tabloid headlines, pulling out their wallets or bagging their merchandise.

Nor, he said, is it reasonable to force consumers to keep track of shelf prices, whether by memory or by creating a record, as they shop.

'Who does that?' he wrote.

The appeals court returned the case to US District Judge Sara Ellis in Chicago, who dismissed it in March 2023. A date for the case has not yet been set.

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

Walmart, based in Bentonville, Arkansas, and its lawyers did not immediately respond to requests for comment from Reuters.

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

The lawsuit is thought to be unrelated two other overcharging problems at Walmart.

One was a separate class action that lead Walmart, earlier this year, to settle  a $45 million claim for overcharging for certain packs of meat and citrus fruit. Customers were able to claim up to $500 , but the deadline has now passed.

Meanwhile, in May Walmart admitted a technical issue for several days in mid-March resulted in the retailer overcharging customers in the United States.

The glitch that started on the evening of March 19 prevented price data from flowing to self-checkout kiosks at 1,600 of its 5,000 US stores.

The issue lasted for days and resulted in the company overcharging customers on thousands of items including food, clothes and appliances, according to Bloomberg . Some items also cost less.

Walmart has not said how many shoppers were affected, but - given it has around 37 million customers a day -  it is thought several million were hit.

It comes as Walmart earlier this year settled a totally separate $45 million class-action after it overcharged for certain packs of meat and citrus fruit. Customers can claim up to $500 .