Home Depot will pay a $2m settlement for overcharging customers – but shoppers may not see it in the form of cash

HOME Depot has agreed to pay nearly $2 million to settle a civil enforcement claim brought by California district attorneys over allegations of false advertising and unfair competition.

Shoppers may see compensation from Home Depot but it won't be in the form of money.

According to the complaint, filed in San Diego Superior Court, customers at Home Depot were charged more at checkout than the price listed on the shelf or item tag.

These discrepancies, referred to as “scanner violations,” were the focus of the investigation led by the Los Angeles County District Attorney’s office.

While Home Depot did not admit to any wrongdoing, the company will pay $1.7 million in civil penalties.

They will also shell out an additional $277,251 to cover investigation costs and support future consumer protection law enforcement efforts.

WHAT YOU'LL GET

The settlement also requires Home Depot to implement a price accuracy program to prevent similar issues in the future.

"False advertising and unfair competition are serious offenses that undermine consumer trust and distort the marketplace," Los Angeles County District Attorney George Gascón said in a statement.

"To ensure consistency for our customers, we’ve updated the timing of our price changes," Home Depot spokesperson George Lane exclusively confirmed to The U.S. Sun regarding the matter.

However, the Los Angeles DA's office noted that the company was cooperative during the investigation.

FINANCIAL MOVES

Despite the settlement, the civil penalties represent a relatively small financial hit for Home Depot, which is the fifth-largest retailer in the US.

The company announced plans to acquire SRS Distribution, a building-projects supplier for $18.3 billion, per a press release.

SRS is a major player in the residential specialty trade distribution market, serving professional roofers, landscapers, and pool contractors across various sectors.

Ted Decker, Home Depot's chair, president, and CEO, praised the acquisition, saying, "SRS is an excellent fit for The Home Depot – it's both complementary and additive to our growth.

"Their strong leadership, culture, and outstanding customer service will help us drive value for our customers, associates, and shareholders."

Decker added that the merger would bolster Home Depot's position in key specialty trade markets and accelerate growth in the residential professional customer sector.

What's a class-action settlement?

Class action lawsuits offer groups of people, or 'classes,' a way to band together in court.

These suits are often brought by one or a few people who allege a company or other entity has wronged a large group of people.

When a suit becomes a class action, it extends to all "class members," or people who may have similar complaints to those who filed the suit.

Companies often settle class actions - offering payment to class members who typically waive their right to pursue further legal action by accepting money.

These payout agreements frequently include statements by the defendant denying wrongdoing. Companies tend to settle class actions to avoid the costs of further litigation.

Pollution, discrimination, or false advertising are a few examples of what can land a class action on a company's doorstep.

The acquisition will expand Home Depot's total addressable market to roughly $1 trillion, representing a $50 billion increase.

By integrating SRS’s capabilities, Home Depot aims to better serve complex purchasing needs and establish itself as a leader in specialty trade distribution across multiple verticals.

This move aligns with Home Depot's strategy to enhance its offerings for professional contractors and increase its market presence in specialized trades.

The agreement to acquire SRS was first announced on March 28, 2024, and has now reached completion, marking a significant milestone in Home Depot’s continued growth trajectory.

In other Home Depot news, some shoppers have found a $10 draft gadget just in time for the winter.

Plus, check out some Halloween decorations fro mthe retailer to make your home spooky for the holiday.