Late last month, the Washington state attorney general sued Albertsons and Safeway alleging that they manipulated prices just before promoting buy one, get one free sales. (See complaint.)
*MOUSE PRINT:
The AG asserts:
When Defendants schedule a BOGO promotion, they artificially increase the price of the BOGO item in the run-up to the promotion, only to bring the price back down to the pre-BOGO level after the promotion is over.
…on August 20, 2020, the price of a 16.9 oz bottle of O Organics Extra Virgin Olive Oil was $6.99 at the Albertsons on 51st Avenue in Gig Harbor, WA, but Defendants raised the price over 57% (to $10.99) for a BOGO promotion that started a week later. After the BOGO promotion ended, Defendants brought the price back down to $6.99.
Over a five-year period, the lawsuit alleges that Albertson’s overcharged consumers on more than three-million transactions, netting the company almost $20-million.
And this is not the first time the supermarket company has faced charges like this. In 2016, they paid $107-million to settle a similar class action lawsuit, and an unspecified amount in 2023 after a similar suit was settled.
The AG asserts various law violations under the state consumer protection act and seeks restitution for shoppers.
Albertsons Companies operates supermarkets under many different nameplates around the country, including Acme, Carr’s, Haggen, Jewel Osco, Lucky, Pavilions, Randall, Star Market, Shaw’s, Tom Thumb, Von’s, and more. There is no reason to believe that some of these alleged shenanigans are limited to their stores just in Washington state.
However, don’t jump to the conclusion that all their BOGO sales are bogus. There is not a single “regular” price for groceries at supermarkets. Stores offer a variety of sale prices throughout the year. The olive oil above, for example, might be offered at various sale prices during the year, such as $6.99, $9.99, or even buy one, get one free.
Certainly if the store jacks up the price the week before the BOGO sale just to discount it the next week, that is a problem. But retail and advertising laws generally allow stores to establish a “regular” by offering the product in good faith for a reasonable period of time before being allowed to discount it (and make savings claims comparing that sale price to its former price). Washington state does not appear to have specific regulations in this regard.
However, the Federal Trade Commission’s Deceptive Pricing guidelines make clear this prohibition:
Where the seller, in making such an offer, [like BOGO] increases his regular price of the article required to be bought … the consumer may be deceived.
And in a move not good for shoppers just last month, the Washington state supreme court ruled against a consumer who claimed they didn’t really save as much money as they were led to believe when the seller used a misleading regular price. The court found against the consumer saying he/she suffered no actual loss of money despite the misrepresentation.
If I had to guess, Albertsons will settle this case with the WA-AG eventually for a lot of money.