Walgreens to pay $2.25 million in price scanner and expired products case in Contra Costa, other Bay Area counties

At the corner of happy, healthy and higher prices? Violations attributed to human error.

The Contra Costa County District Attorney’s Office announced on Tuesday that its Consumer Protection Unit joined with the District Attorneys of Santa Clara, San Mateo and Santa Cruz Counties in a civil law enforcement action against Walgreen Co., the operator of more than 600 Walgreens stores in California. Walgreens, a nationwide corporation, has its headquarters in Deerfield, Illinois.

The civil action was based in part upon scanner inspections conducted by local Weights and Measures offices, including the office of Contra Costa County Department of Agriculture Division of Weights & Measures, Humberto Izquierdo Director. The District Attorneys alleged that Walgreens violated state law by charging customers more than the lowest posted or advertised price for items.

The alleged violations also included Walgreens’ failure to comply with laws prohibiting selling or offering to sell infant formula or baby food after the “use by” date and over-the-counter drugs after the expiration date has passed. These violations were discovered as a result of inspections by the County Environmental Health Services Divisions and District Attorney Investigation Units. The Santa Clara County Superior Court approved the Modified Stipulated Judgment on January 29, 2018.

“It seems that Walgreen’s couldn’t get their act together here, more than other counties,” said Deputy District Attorney Gary E. Koeppel of the Consumer Protection Unit. He was the lead Deputy DA from Contra Costa County, prepared much of the documentation and was the main contact for negotiations with Walgreens’ law firm in San Francisco. “We were having probably a larger problem here in Contra Costa.”

Without admitting wrongdoing, Walgreens agreed to pay $2,250,000 in civil penalties and costs. The judgment also prohibits violating applicable laws and requires Walgreens to institute a compliance program. That program includes procedures to ensure the removal of infant formula, baby food and over-the counter drugs prior to the “use by” or “expiration” dates. The program also requires procedures to ensure that consumers are charged accurate prices, such as removal of shelf tags from store shelves prior to expiration and adjusting charges at point of sale to reflect the lowest advertised, posted or quoted price on the sales floor for in-store purchases.

The present Modified Stipulated Final Judgment “superseded” or replaced a 2013 pricing violations judgment against Walgreens, by adding new injunctive, compliance and civil penalty and costs provisions to address the new pricing and expired product violations. Walgreens cooperated with prosecutors during the investigation and the resolution of this case.

District Attorneys work with Departments of Weights & Measures to protect consumers from pricing errors and with Environmental Health Divisions to enforce laws prohibiting the sale of certain expired products. Consumers should always check receipts to verify that they are charged the correct price and make sure that the products they purchase are not beyond their expiration dates.

“If there’s a tag on the shelf that indicates a price and when scanned it indicates a higher price, it’s a violation,” Koeppel said. “The provisions in the state Business and Professions Code are clear. You have to sell it at the lowest, advertised price, even if it has expired. If it’s still on the shelf at the lower price with a tag in black and white, they have to sell at the expired price.”

“The County Agriculture Department’s County Weights and Measures are responsible for this, including gas stations,” he added.

“During the course of our negotiations over the scanner violations we did an undercover operation with our health departments throughout the state and we came up with about 33% of the stores that came back with over the counter pain medication and baby formula that had expired dates,” he stated.

Part of the injunction includes the requirement that at least 90 days before the expiration on pain medication and 30 days for baby formula Walgreens must remove those items from the shelves,” Koeppel explained, “Then other requirements such as posting of conspicuous signs.”

“Regarding the scanner violations, we’ve had this term placed in other injunctions with other big box stores, requiring managers have to walk through the aisles once a week and pull expired tags,” he continued. “Plus, they’re required to keep records whenever customers complain any time prices are higher and enter that data into a system that keeps track of scanner price modifications, when the shelf price was lower than the scanned price.”

Asked if the stores are required to provide a period report, Koeppel replied, “No. But, Weights & Measures has the right to go in any time and request a copy of the report.”

He wanted to point out that “Walgreens has been very cooperative and primarily blame the violations on human error,” due to “the turnover in employees and difficulty training them. Nothing constitutes an intentional violation. For clarity, they’re not alone. I’m not going to name other stores. But, scanner violations are very common in big box situations. It’s been pretty rampant, over the years. Unintentionally, for the most part.”

Asked about the liability the stores face, Koeppel responded, “It’s a big, potential liability issue with the baby formula and pain medication if someone got sick. But, from our discussions with experts, the best would be weaker potency, not greater health risks.”

Allen Payton contributed to this report.

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