Whole Foods' pricing tomfoolery did not go unnoticed by the Department of Consumer Affairs, and today the agency announced a list of requirements to which the chain must adhere. After New York City markets were found to be mis-labeling prices on pre-packaged foods, a DCA investigation uncovered the "worst case of mislabeling" many inspectors had seen in their careers. As a result, the grocer has agreed to pay $500,000—down from an alleged $1.5 million initially proposed by the DCA—in addition to other changes in methodology.
According to a release by the agency, all NYC Whole Foods locations will now be required to check at least 50 products from 10 departments on a quarterly basis to ensure accurate labeling; immediately remove mislabeled products—as uncovered by DCA inspectors—and then test at least 20 other products in the same department; require employees to weigh each item separately and not estimate; and conduct training for all employees who are part of the weighing and labeling process.
Though they admitted to some wrongdoing when the initial investigation first made headlines, Whole Foods adamantly disagreed with the DCA's findings, calling them "overreaching allegations." So, too, do they disagree with the DCA's current characterization of the agreement reached between the two, accusing the DCA of "misrepresent[ing] this agreement."
Whole Foods Market has had in place pre-existing pricing and weights/measures programs including a third party auditing and training program and a 100% pricing accuracy guarantee that gives customers a full refund on any item inadvertently mispriced. These are pre-existing programs that go above and beyond the DCA’s requirements. Furthermore, the DCA’s allegations of violations on weighted/measured items were limited to New York City, and as our joint agreement states, there was no evidence of systematic or intentional misconduct by anyone in the Northeast region or the rest of the company.
Through a spokesperson, the grocer says they only agreed to pay the half million "in order to put this issue behind us." In a similar case in California, the grocer paid out $800,000.
The issue isn't quite in the rear view mirror for Whole Foods, as there are still civil lawsuits filed by customers who were caught up in the mis-labeling controversy.