Walmart Faces a Class-Action Lawsuit Due to Inaccurate Price Labels

Walmart is facing a class-action lawsuit following a ruling by the 7th U.S. Circuit Court of Appeals in Chicago on July 3. The lawsuit, initiated by Ohio resident Yoram Kahn, alleges that Walmart used inaccurate price labels, constituting a “bait-and-switch” scheme where prices at checkout were higher than those advertised on shelves.

The Chicago court’s decision allows consumers to pursue claims under various consumer protection laws. Within the lawsuit, previous cases were also brought up and noted. In 2012, a California court presented Walmart with a “$2 million fine for violating a 2008 ruling requiring it to resolve pricing errors at checkout,” and in 2021, two North Carolina stores were fined for “‘repeated’ and ‘excessive’ price-scanner errors that resulted in customer overcharges.”

Kahn’s first attempt at the lawsuit was dismissed last year when an Illinois district court ruled that customers are given receipts by Walmart and can compare paid prices with shelf prices. Then on July 3, a Chicago federal appeals court reversed the district court’s decision to side with consumers and their ability to easily lose track of price discrepancies.

Moreover, Walmart plans to introduce electronic shelf labels (DSLs) at 2,300 U.S. stores by 2026, replacing traditional price stickers. This move aims to enhance efficiency for associates by reducing time spent on pricing updates and improving stock replenishment and order fulfillment processes.

DSLs are touted for their environmental benefits and readability, providing associates more time to assist customers. Other retailers like Whole Foods and Amazon Fresh already utilize electronic labels, while concerns persist about the potential for dynamic pricing capabilities associated with this technology.

However, Walmart emphasized that its new electronic shelf label program is not intended for dynamic pricing, reaffirming its commitment to “Everyday Low Price.” Greg Cathey, SVP of transformation and innovation at Walmart, reiterated at the annual shareholder meeting that dynamic pricing would not be implemented with DSLs, stating that there are no plans for fluctuating prices based on short-term changes in demand.