Rite Aid ordered to pay $800,000 to settle false advertising lawsuit
SAN DIEGO (CNS) – A San Diego judge Wednesday ordered Rite Aid Corp. and its
California subsidiary Thrifty PayLess Inc. to pay $800,000 in penalties and
costs to settle a consumer protection lawsuit that alleged false advertising
and failure to redeem gift cards with balances of less than $10 for cash in
Rite Aid stores.
The companies agreed to make in-store changes to resolve the case filed
by the San Diego City Attorney's Consumer Protection Unit, together with
prosecutors from the Santa Clara, Riverside and Ventura County District
“This enforcement action is important to our citizens,” said San Diego
City Attorney Jan Goldsmith. “The law requires that advertising must be
clear so that consumers know what they are paying for an item before it's
purchased. And because of this lawsuit, Rite Aid now has a simple procedure in
place to redeem gift cards with balances less than $10 for cash.”
The complaint alleges that Rite Aid advertisements conveyed to consumers
that they would pay lower prices for items purchased using the Rite Aid
Wellness-plus Card. However, once at the register the customer could not
purchase the item at the advertised price. Instead, the customer got a coupon
printed on the end of his/her receipt for money off a future purchase that
would expire and was subject to other restrictions.
The complaint alleges that Rite Aid failed to adequately inform
consumers that the product could not be purchased at the advertised price. In
the settlement, the companies agreed that Rite Aid will clearly display the
limitations and all the conditions necessary for customers to purchase items
for advertised prices.
Also as part of the settlement, Rite Aid stores will institute a new
system at customer credit card terminals in which the computer will prompt
consumers when gift cards are below $10, and ask if the would like to redeem
the card for cash.
Superior Court Judge Ronald Prager ordered Rite Aid and Thrifty PayLess
not to commit future violations, and that the companies pay $25,000 in costs
and $75,000 for the California Department of Food and Agriculture, Division of
Measurement Standards' price verification program.