Walmart faces class action lawsuit over inaccurate price tags

Walmart is facing a class action lawsuit following a July 3 ruling by the 7th U.S. Circuit Court of Appeals in Chicago. In the suit, brought by Ohio resident Yoram Kahn, Walmart claims that the company used inaccurate price tags, creating a loss leader offer in which prices at checkout were higher than those posted on shelves.

The Chicago court’s decision allows consumers to pursue claims under various consumer protection laws. The lawsuit also raised and noted previous cases. In 2012, a California court fined Walmart “$2 million for violating a 2008 ruling that required the company to fix pricing errors at checkout,” and in 2021, two North Carolina stores were fined for “‘repeated’ and ‘excessive’ price scanner errors that resulted in inflated prices for customers.”

Kahn’s first attempt to file a lawsuit was dismissed last year when an Illinois district court ruled that Walmart customers can obtain receipts and compare the prices they paid with store prices. Then on July 3, a federal appeals court in Chicago overturned the district court’s decision, siding with consumers and their ability to easily lose sight of price differences.

In addition, Walmart plans to introduce electronic shelf labels (DSLs) to replace traditional price stickers in 2,300 U.S. stores by 2026. The move is expected to increase associate efficiency by reducing the time spent on price updates and improving replenishment and order fulfillment processes.

DSLs are hailed for their environmental friendliness and readability, giving employees more time to serve customers. Other retailers such as Whole Foods and Amazon Fresh already use electronic labels, but concerns remain about the potential dynamic pricing opportunities associated with this technology.

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