Walgreen Co.'s persisting failure to remove expired sales tags from its shelves deceives customers and violates a 2014 settlement that sought to resolve the matter in Missouri, the state's attorney general argued Tuesday in asking a state court to punish the pharmacy chain.
Attorney General Chris Koster filed court documents asking a judge to hold the nation's largest pharmacy retailer in contempt of the settlement and issue steeper fines, including up to $5,000 for each expired tag. Koster said that since July, undercover investigators have found a total of more than 1,300 shelf tags displaying sales prices that had expired in all but one of 50 Walgreen stores.
Koster said the lapsed tags subjected customers to unwittingly being overcharged and ran afoul of the company's promise to remove the tags within 12 hours of their expiration. Two of the tags had expired in 2013, he said.
"Consumers should not have to dig through outdated and incorrect information to find the true price of an item," Koster said in announcing his latest legal filings against the company, based in the Chicago suburb of Deerfield, Illinois. He called the expired sales tags "a flagrant defiance of the court's order."
"I believe the problem is rooted in negligence. I don't believe they care," Koster added. "This has become institutionalized as a marketing technique for Walgreens, and it is outrageous."
Walgreen spokesman Phil Caruso declined immediate comment. He said the company may publicly respond to Koster's allegations later Tuesday.
Koster sued Walgreen in 2013, accusing it of overcharging customers and using deceptive advertising and pricing schemes in Missouri. The undercover investigation took place in eight stores in St. Louis, Kansas City, Springfield, Jefferson City and Osage Beach after consumers complained that display prices didn't match up with what they paid at checkout.
At that time, Koster cited several ways in which consumers were overcharged, including outdated price displays for sale items and confusion created by multiple prices displayed for the same item. Of 205 items purchased by investigators, 43 had price discrepancies ranging from a few cents to $15, Koster said.
Under the 2014 settlement, Walgreen agreed to pay for an independent auditor to scrutinize 25 percent of the company's stores every three months until mid-2017. Walgreen faced a penalty of $1,500 for each store that failed its first inspection, $3,000 for each one that fails a second inspection, and $5,000 for each store that fails a third or subsequent inspection.
Koster said Tuesday that the company already has paid the state $136,500 for pricing violations uncovered by the audits.
"Obviously, $136,000 in fines doesn't seem to be enough to get Walgreen's attention," he said.
Walgreen has roughly 8,240 stores in 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.