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Whole Foods under fire for overcharging customers

New York City Consumer Affairs inspectors call it the "worst case of mislabeling they have seen in their careers.”

Last updated: January 12, 2016 03:40 PM

Update, January 12, 2015: In late December 2015, Whole Foods agreed to settle allegations with the New York City Department of Consumer Affairs that the chain overcharged customers. The settlement calls for the Whole Foods to pay a $500,000 fine and be more vigilant about its pricing practices. Going forward, Whole Foods will implement the following practices at all nine of its city stores: 

  • Conduct quarterly in-store audits of at least 50 products from 10 different departments to help ensure products are accurately weighed and labeled, and to correct all inaccuracies.
  • Immediately remove all mislabeled products (discovered in the future) and, within 15 days, check the accuracy of that product’s pricing, as well as 20 additional products from the same department.
  • Require employees to weigh—not estimate the weight—of each individual package.
  • Conduct training seminars for all store employees engaged in weighing and labeling products.

Whole Foods released its own response to the settlement, saying the company has had in place preexisting pricing and weights/measures programs including third-party auditing, training programs, and a 100 percent pricing accuracy guarantee that gives customers a full refund on any item inadvertently mispriced. "We agreed to $500,000 in order to put this issue behind us so that we can continue to focus our attention on providing our New York City customers with the highest level of quality and service," the company said.

For the second time in a yearWhole Foods Market has been slammed for ripping off shoppers by selling products with the weight incorrectly labeled. The New York City Department of Consumer Affairs (DCA) on Wednesday released the results of its ongoing investigation that contends the high-end grocer routinely overcharged customers by overstating the contents of prepackaged foods. The discrepancies resulted in overcharges of 80 cents to nearly $15 per package, according to officials.

In addition, the DCA said that 89 percent of the packages it re-weighed failed to meet the federal standard for the maximum amount that a package can deviate from the actual weight. DCA tested 80 different types of pre-packaged products including meat, dairy, and baked goods.

Take a look at the results of our latest survey to see which supermarkets have the best and worst prices.  Also, read about "The real cost of impulse shopping at the supermarket."

The department characterized the overcharges as the byproduct of a “systematic problem with how products packaged for sale at Whole Foods are weighed and labeled,” according to a DCA statement. “The findings suggest that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers.” The overcharges were especially prevalent in packages that had been labeled with exactly the same weight when it would be practically impossible for all of the packages to weigh the same amount, the report said. The products included nuts, berries, vegetables, and seafood. 

In response to the charges, Michael Sinatra, public relations and public affairs manager for Whole Foods Northeast region, said, “We disagree with the DCA’s overreaching allegations and we are vigorously defending ourselves. We cooperated fully with the DCA from the beginning until we disagreed with their grossly excessive monetary demands. Despite our requests to the DCA, they have not provided evidence to back up their demands nor have they requested any additional information from us, but instead have taken this to the media to coerce us. Our customers are our number one stakeholder and we highly value their trust in us.”

DCA Commissioner Julie Menin pulled no punches in describing the severity of the allegations: “Our inspectors tell me this is the worst case of mislabeling they have seen in their careers,” she said.

Regular inspections

In New York City, the Department of Consumer Affairs regularly inspects supermarkets for scanner, scale, and pricing accuracy. Inspectors first noticed labeling problems at Whole Foods stores last fall, which persisted when they revisited several of the locations during the winter.  To date, the probe has involved the chain’s eight stores that were in operation at the time of the inspections. Since then, a ninth has opened.

The fine for falsely labeling a package is as much as $950 for the first violation and up to $1,700 for a subsequent violation. The potential number of violations that Whole Foods faces for all pre-packaged goods in the NYC stores is in the thousands, the DCA said.

Last June, we reported on a settlement between Whole Foods and City Attorneys in the California cities of Los Angeles, Santa Monica, and San Diego over widespread pricing violations that included: Failure to deduct the “tare” weight of containers when ringing up charges for self-serve foods at the salad bar and hot bar; giving less weight than the amount stated on the label for packaged items sold by the pound; and selling items such as kebabs and other prepared deli foods by the piece, instead of by the pound as required by law. The chain agreed to pay close to $800,000 in penalties and implement a strict in-house pricing-accuracy program. 

What you can do

Our subscribers have long been less than satisfied with pricing at Whole Foods. In our latest supermarket survey, respondents criticized Whole Foods for having some of the highest prices of any grocery store in the country. Whole Foods isn't the only supermarket chain that's got in hot water for pricing irregularities in recent years. Safeway and Ralphs have been penalized, too. If you suspect an item isn't the correct weight, take a few packages and compare them on the consumer scale set aside at most grocery stores for that specific purpose.

—Tod Marks

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