Check your receipts! Home Depot to pay $2 million for false advertising and overcharging customers

Do you always check your receipts after making a purchase? Otherwise, you may end up paying too much without even realizing it.

Last week, Home Depot, the popular computer hardware retailer, was ordered to pay nearly $2 million in a settlement over allegations of false advertising and overcharging customers. The settlement follows a civil lawsuit filed by several California district attorneys accusing the company of unfair competition and deceptive pricing practices.

Overcharging at checkout

The complaint filed in San Diego Superior Court alleges that Home Depot customers are often charged higher prices at the checkout than what is displayed on shelf labels or on the items themselves. These discrepancies, called “scanner violations,” result in customers paying higher prices than expected.

Although Home Depot did not admit any wrongdoing, it was ordered to pay $1.7 million in civil penalties and an additional $277,251 to cover investigation costs and fund future consumer protection efforts. In addition to the financial penalties, the company must implement a pricing accuracy program to prevent future pricing errors.

“False advertising and unfair competition are serious crimes that undermine consumer confidence and distort the marketplace,” said Los Angeles County District Attorney George Gascón, stressing the need for retailers to maintain accurate prices.

How common are overloads?

Overpricing at the checkout is more common than many consumers realise. According to the UK Competition and Markets Authority (CMA), 60% of pricing errors result in customers being charged too high prices. The CMA investigated the pricing practices of 139 grocery stores in England and Wales, including large supermarket chains and small independent retailers.

The results revealed that 4.2% of supermarkets, 14.4% of symbol convenience stores, 5.6% of convenience stores and 7.8% of independent food stores experienced pricing errors. These errors were particularly common for fresh produce and promotional items, where discrepancies between advertised prices and actual prices at the checkout were often observed.

George Lusty, acting chief executive of the CMA, said: “We know how frustrating it can be to go to the checkout and find that the price is not what was advertised. While many food retailers comply with the pricing rules, this needs to be consistent across all types of store.”

He added: “It is important that buyers make informed choices based on accurate information, especially when many are keen to save money.”

Home Depot’s settlement isn’t the first of its kind

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

These incidents highlight a widespread problem in the retail sector, where errors in product pricing and weight can lead consumers to pay more than expected.

How to avoid paying too much

Experts recommend a few simple precautions to avoid overcharging for an item. First, always check that the price on an item’s tag or display panel matches the price you’re charged at the 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 to weigh your items before proceeding to the checkout. When using a self-checkout, make sure the scale on the register is at zero before weighing your item. If you notice any inaccuracies, report them to store staff immediately.

If the edges of the store scale are rubbing against the machine, it can cause an inaccurate reading. So it’s a good idea to check the edges of the scale before weighing your items. In many cases, even if a sale has expired, the retailer must legally honor the price if a sale sign is still displayed.

Policies regarding overcharging vary from state to state. For example, in Wisconsin, overcharged customers are entitled to a refund of the difference between the listed price and the invoice price. Some retailers may even offer the overcharged item for free as compensation.

What’s next for Home Depot?

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

For now, the message to buyers is clear: always check your receipts, because you never know when you might be overcharged.