Macy’s to Pay $1.7 Million, Give Discounts to Settle Inaccurate-Price Case

The West Coast division of Macy’s has agreed to pay $1.7 million and offer merchandise discounts to settle a lawsuit alleging that customers were overcharged at its department stores in California, the Los Angeles County district attorney’s office said Friday.

Checkout-counter scanners at Macy’s West Inc. stores routinely charged prices higher than those marked on shelves or listed in ads, said Thomas Papageorge, head of the district attorney’s consumer protection division.

A pattern of “significant overcharges” affected thousands of consumers in California, he said. In some cases, customers were charged $2 to $10 more than the listed price, Papageorge said.

Macy’s, which has 104 stores in California, wasn’t charged with intentionally deceiving customers and has admitted no wrongdoing.

“Our top priority is to make sure our customers receive the correct price on all merchandise when they shop in our stores,” said Robert L. Mettler, chief executive of Macy’s West.

As part of the settlement, Macy’s, a unit of Cincinnati-based Federated Department Stores Inc., will place coupons in newspapers statewide in August. The coupons will be good for $5 off purchases at a Macy’s store in the state.

In addition, the company agreed to implement a program to improve the accuracy of its pricing. As part of that effort, if a customer is overcharged for an item that costs up to $10, the shopper will receive the item at no charge. For higher-priced items, Macys will reduce the price by $10.

Questions about pricing at Macy’s arose three years ago, when shoppers began complaining about overcharges, Papageorge said. Government agencies that conduct routine spot checks in stores began noting what appeared to be a pattern of “scanner violations.”

After a two-year investigation, negotiations with Macy’s West began in early 2003, he said. Los Angeles, Marin, Shasta and Sonoma counties and the city of San Diego were involved in the case and will share evenly in the settlement.