WALMART has been accused of misleading shoppers over prices and robbing them of millions of dollars in a bombshell lawsuit.

Customer Yoram Kahn originally sued the chain in August 2022, claiming he was charged $1.89 extra at checkout than was advertised on shelves.

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His case had been thrown out before a federal appeals court on Wednesday decided to overturn the ruling and allow his suit to move forward.

If Walmart is found guilty of using deceptive pricing practices on their shelves, it could have a groundbreaking impact on the future of consumer protection laws.

The renewed suit comes after Walmart announced earlier this year it will upgrade its shelf price tags to digital, which industry leaders have already warned could be used against customers.

“If it’s hot outside, we can raise the price of water and ice cream,” Phil Lempert, a grocery industry analyst, told NPR about the new tags.

The federal appellate court ruled in favor of Yoram Kahn, an Ohio shopper who filed a class action lawsuit against Walmart in August 2022, and sends the case back to court in northern Illinois for further proceedings.

Kahn claims to have paid $2.28 for a jar of salsa, not including tax, that was advertised on the store shelf as only costing $2.00.

In the same visit, he paid $1.88 for a Kit-Kat bar that was listed at $1.64.

Although these discrepancies may seem minor, and many customers wouldn’t notice because of sales taxes, the increased costs resulted in markups of 9% to 15%.

This would mean, if found to be true, that Walmart has been stealing hundreds of millions of dollars from consumers in hidden mark-ups, according to the lawsuit.

Kahn claims that Walmart’s practice of charging higher prices at checkout than advertised on shelves constitutes a fraudulent “bait-and-switch” tactic, violating several state’s consumer protection laws.

Beware of Hidden Fees and Scams at Walmart

Kahn also argued this was a normal practice throughout Walmart stores nationwide, citing several instances of numerous different state authorities issuing five-to seven-figure fines against the chain over similar price discrepancies.

“For example, in 2012, the state of California, led by then-Attorney General Kamala Harris, assessed Walmart a $2 million fine for violating a 2008 ruling requiring it to resolve pricing errors at checkout,” Kahn wrote in his lawsuit.

Stanley Bernstein, a lawyer for the plaintiffs, says he has identified similar price discrepancies in Walmarts across multiple states, including Florida, Illinois, Indiana, Maryland, New Jersey, New York, and North Carolina.

But during Walmart’s defense, the retail giant said that it is “virtually impossible” to keep item prices consistent between shelf and checkout at all times.

“Neither the law nor industry standard require perfection,” they wrote in a brief filing.

“Any contrary position would in effect hold retailers strictly liable any time a shelf price fails to match a purchase price, no matter the reason,” Walmart wrote.

‘HONEST MISTAKES’

The retailer’s attorney, Daniel Blouin, also said in January during oral arguments that Khan and other customers who are overcharged are “honest mistakes.”

“That’s the underlying point that they’re trying to make throughout this entire lawsuit,” Blouin said in his argument.

“That even in a simple situation where an honest mistake is made, [Walmart] should be held liable.”

In the original decision, which Khan appealed a month later, a lower court in northern Illinois dismissed the case and ruled that Walmart had not carried out any “intentionally deceptive practice” as defined by the relevant state statutes.

Because Kahn received a receipt that displayed the overpayments, US District Judge Sara Ellis said there was nothing deceptive taking place, since he and other customers could see the discrepancies after purchase.

“Kahn could, and indeed did, use [his] receipt to compare the prices Walmart charged him with the advertised shelf pricing,” US District Judge Sara Ellis wrote in her dismissal.

“This comparison revealed the discrepancy and dispelled any potential deception,” she said.

But on Wednesday, this was rejected by The Seventh Circuit panel, which explained that a receipt doesn’t excuse any potential pricing deception by Walmart as a matter of law.

“There is nothing implausible about his allegations that
Walmart’s inaccurate shelf prices are likely to deceive a significant portion of reasonable consumers,” the court said in its unanimous decision.

“First, Walmart provides receipts to its customers only after their transactions have concluded,” Circuit Judge David Hamilton wrote in his reasoning.

“Corrective information provided to the consumer after the transaction will not necessarily affect the reasonable consumer analysis,” Hamilton continued.

He also said that the lower court’s reasoning would require unreasonable efforts by consumers to protect themselves from the deception, forcing consumers to try and keep track of every shelf item’s prices, whether by memory or by creating a record as they shop.

“As the district court acknowledged, a receipt by itself will not dispel deception created by inaccurate shelf prices,” the judge continued.

“Rather, only the plaintiff’s comparison of the prices actually charged at the register against the advertised shelf pricing dispelled the potential deception.”

FURTHER PROCEEDINGS

The 32-page decision now sends the case back to northern Illinois for proceedings with the applied logic from the higher court.

“When Kahn checked out, the actual prices of these six items scanned at ten to fifteen percent markups above the shelf prices,” the federal appellate court ruled.

“In total, Kahn paid Walmart $1.89 in overcharges on these six items, nearly seven percent of the pretax total of his bill,” the court said.

“Small change for Kahn as an individual, no doubt, but keep in mind the volume of Walmart’s business.”

After the ruling, Bernstein expressed his satisfaction with the appellate court’s decision, saying in a statement, “We are pleased with the opinion and look forward to vindicating the rights of Walmart customers.”

As the case is now set to proceed, it could have broad implications for how retailers manage and display prices, potentially leading to more stringent enforcement of consumer protection laws.

The U.S. Sun has reached out to Walmart for comment on the ongoing litigation.