Walgreens’ Settlement—Beware How you Describe Your Deals

The Office of the New York Attorney General entered into a $500,000 settlement with Walgreens last week over false pricing information in its Walgreens and Duane Reade stores in New York.

The New York Attorney General began investigating Walgreens’ advertising and pricing practices in early 2014. Investigators visited a sampling of Walgreens and Duane Reade New York stores and reportedly found a series of pricing errors and misleading advertisements in violation of New York law. Some of the alleged practices are run-of-the-mill mistakes—price tags displaying expired pricing information and consumers paying more at the register than the advertised price.

Other alleged practices involved overhyping deals. For example, some products were advertised as “Smart Buy” or “Great Buy” when in reality the advertised price was no different than the original selling price. In other instances items were advertised as “Last Chance” or “Clearance” implying the items would be on sale for only a limited time when in fact that was not case. Finally, the complaint alleges that some of the advertisements implied that consumers would receive an immediate cash discount on certain items by stating “like paying . . .” or “like buying . . .” when the discount could only be applied to future purchases and came with conditions.

The settlement terms themselves are also worth noting. Walgreens agreed to conduct employee training and to submit to internal and external compliance audits.

So in an era when it is increasingly harder to rise above the clutter, make sure your marketers steer clear of overdramatizing deals.