Walmart could soon head to court over its pricing practices.
The country’s largest retailer must face a class-action lawsuit alleging that it deceives customers by charging higher prices at the checkout counter than it advertises, according to a court order issued by an appeals court in Chicago on July 3.
Yoram Khan, an Ohio resident, first filed the lawsuit after finding “numerous small discrepancies between the prices advertised on Walmart’s shelves and the prices actually charged at the cash register.” After shopping at a store in Niles, Ohio in August 2022, Kahn found that the retailer charged him more than the advertised shelf price on six of the 15 items he purchased. The markups ranged from 10% to 15% higher than the shelf pricing.
While the discrepancies are small, Khan alleged that they add up to “hundreds of millions of dollars” each year, according to the court order.
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Khan filed the lawsuit after an investigation by his lawyers found similar examples of overcharges at other Walmart locations in Illinois, as well as stores in Florida, Indiana, Maryland, New Jersey, and New York. He alleged that “Walmart is aware of these discrepancies between shelf prices and register prices and that its unfair and deceptive pricing practices are pervasive and continuous.”
A district court dismissed Khan’s lawsuit on the grounds that Walmart provides customers with a receipt to compare the scanned price with the shelf price, meaning there is “no possibility for deception.”
The appeals court reversed that dismissal last week, saying a receipt isn’t sufficient to dispel potential deception or unfairness caused by an inaccurate shelf price. The court also cited several cases where state agencies imposed fines on Walmart for similar practices. California, for example, levied a $2 million fine against Walmart in 2021 for violating a 2008 ruling requiring it to resolve pricing errors at checkout.
To move forward, Khan will have to file an amended suit showing that the pricing practices contain plausible likelihood of future injury that would warrant injunctive relief, the court ruled.