Whole Foods smacked with overcharging accusations

People expect to pay high prices when they shop at Whole Foods. What they don’t expect is for Whole Foods stores to overcharge them by claiming store packaged items weigh more than they do. According to New York City’s Department of Consumer Affairs, that’s exactly what’s been happening and people have taken to social media to voice their anger with Whole Foods even after the chain said allegations it was "systematically overcharging" customers were "completely inaccurate."

Last week, New York’s Department of Consumer Affairs Commissioner, Julie Menin, claimed her department had tested 80 different products and found mislabeled weights that resulted in higher prices for the chain’s customers. The most egregious example was a package of coconut shrimp with a price $14.84 higher than its weight warranted.

"Our inspectors tell me this is the worst case of mislabeling they have seen in their careers, which DCA and New Yorkers will not tolerate," said Ms. Menin. "As a large chain grocery store, Whole Foods has the money and resources to ensure greater accuracy and to correct what appears to be a widespread problem — the city’s shoppers deserve to be correctly charged."

In-store personalization

Photo: RetailWire

It should be noted that Whole Foods was not alone in overcharging customers. While it was called out as a serious offender, 77 percent of stores checked by NYC inspectors were found to have at least one violation.

For it’s part, Whole Foods has said it aims to be 100 percent accurate but that mistakes can happen as a result of scales that need to be calibrated correctly or simple human error. The company announced it was taking steps to improve its associate training and that it had hired a third-party to audit stores across the country.

The company also reminded customers to ask cashiers to check the weight of any store packed item if they have concerns. If it turns out the weight is not in the customer’s favor, the item is free.

Working against Whole Foods in the court of public opinion are previous cases in which the chain paid fines for inaccurate pricing, including $800,000 in California last year.

BrainTrust

"Being accused of overcharging is never a good thing for a retailer. It’s even worse when some people refer to you as Whole Paycheck. I am assuming the mis-priced items were those that were packaged at the store."

Steve Montgomery

President, b2b Solutions, LLC


"I have to say I was pretty well shocked by it. And in reality the company hasn’t really denied the charges, just made some weak excuses for it."

Paula Rosenblum

Co-founder, RSR Research


"Whole Foods says mistakes can happen as a result of scales that need to be calibrated correctly or simple human error. So I would ask the question: do mistakes also happen in the customer’s favor?"

David Biernbaum

Founder & President, David Biernbaum & Associates LLC


Discussion Questions

Do you think Whole Foods’ brand image has been hurt by allegations it overcharges customers? What would you guess is at the root of the pricing inaccuracies? How should Whole Foods and other grocers assure better accuracy?

Poll

16 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Steve Montgomery
Steve Montgomery
8 years ago

Being accused of overcharging is never a good thing for a retailer. It’s even worse when some people refer to you as Whole Paycheck.

I am assuming the mis-priced items were those that were packaged at the store. Common errors are entering the wrong product code, misidentifying the product and not adjusting properly for the weight of the package.

As Whole Foods has indicated better training is the best way to ensure pricing accuracy. Part of the push on fresh is items that used to be prepared by the supplier are now being done in many supermarkets. This places additional time constraints on the store teams and this can lead to additional pricing mistakes.

Paula Rosenblum
Paula Rosenblum
8 years ago

I have to say I was pretty well shocked by it. And in reality the company hasn’t really denied the charges, just made some weak excuses for it.

I shouldn’t have to ask a cashier to re-weigh what I have bought. That’s pretty lame and, honestly, not my job.

I’ll think twice before buying in-store packaged items at Whole Foods again. And that’s too bad for them, since these are the highest margin items in the store. VERY penny-wise and pound foolish on their part.

David Biernbaum
David Biernbaum
8 years ago

Whole Foods says mistakes can happen as a result of scales that need to be calibrated correctly or simple human error. So I would ask the question: do mistakes also happen in the customer’s favor? I also want to know if this appears to be an issue on a chain-wide basis.

My observation about Whole Foods is that each operation seems quite independent, informal and casual. As we know, that can be a good thing and also a not-so-good thing. Lack of headquarters control allows for each store to be responsive to its own market, but it also allows for a certain lack of standardization in management, training and consistency. Each store is only as good or bad as the store manager.

At any rate, this is a public relations crisis for Whole Foods — the brand, the image and each and every store. Whole Foods needs to be more aggressive with their statements to the public to provide absolute assurance that this issue will be fixed. Unlike in the past, Whole Foods these days has a lot of competition. They are no longer the only game in town.

Tom Redd
Tom Redd
8 years ago

No pain for Whole Foods. They have a customer base that will spend whatever is needed to claim that they shop Whole Foods. They have a bad case of brand blindness. The brand, not the food, is why they shop at Whole Foods. The Whole Foods shoppers are used to wasting money for the sake of image. Kroger divisions have better “natural” foods, but what the hey — toss the money at Whole Foods; it makes you feel hip and in the groove. Whatever (as most of the Whole Foods crowd says.)

Zel Bianco
Zel Bianco
8 years ago

Pricing inaccuracies are either a result of black-hat policies (fairly unlikely in my opinion) or carelessness during packaging — NOT something you want shoppers thinking about.

Whole Foods has enough going for it that they won’t be terribly hurt by this, but they absolutely should have refrained from claiming innocence at least until their third-party assessment reports back.

David Livingston
David Livingston
8 years ago

Perhaps Whole Foods has been hurt. Keep in mind it appears New York’s Department of Consumer Affairs Commissioner, Julie Menin, seems to have an agenda with Whole Foods. She didn’t say Whole Foods was the only offender nor the worst, just a serious offender, which probably every chain is in one way or another, at one time or another. Whole Foods might actually be one of the most accurate of those tested. The name “Whole Foods” is more widely known and makes for better headlines. Whole Foods could have been 100 percent accurate 99 percent of the time.

If my math is correct the total amount of overcharges from all the samples listed was about $58. For stores that do over a $1 million per week at several NYC locations, it would appear a customer has a better chance at hitting the lottery than getting overcharged by Whole Foods. This is great news for the consumer, especially if it’s not in the favor of the customer, they get it for free. Whole Foods can spin this in a positive way and get a lot of free good press if they do it right. The reason for pricing inaccuracies is endless but after doing the math, I trust Whole Foods more now than ever.

John Lingnofski
John Lingnofski
8 years ago

How can this be a simple oversight? Didn’t the Christian Science Monitor article state that Whole Foods paid more than $800,000 in penalties regarding pricing irregularities in 2014?

vic gallese
vic gallese
8 years ago

Nothing the chain can’t recover from. I think Whole Foods has integrity and high standards, if nothing else. That said, it looks like there has been a breakdown and it also looks like Whole Foods has taken swift and proper action to correct it. Having scale calibration checks is nothing new nor complicated.

Gene Detroyer
Gene Detroyer
8 years ago

I wonder if the Department of Consumer Affairs even reports on undercharges?

Clearly this is an operations issue that Whole Foods must address. But it is hardly a crisis that cannot be overcome. It will not chase the customers away, it will just make them aware.

Kenneth Leung
Kenneth Leung
8 years ago

I was a regular shopper of Whole Foods every weekend and I have to admit, I semi-regularly had issues with mis-pricing of produce items. Once or twice a month I would have an item that was higher than advertised price, usually in the vegetable or fruit section. I think that area takes a lot of SKU and pricing fluctuations and doesn’t have scannable SKUs. I do get the item free in my favor but it is annoying. It’s part of the challenge when you are dealing with a lot of non-scannable local produced items.

Roy White
Roy White
8 years ago

Given the fact that this chain’s mantra — its name too, in fact — is all about health and wholesomeness, this constitutes a major crisis and can have damaging consequences in terms of lost reputation and shopper engagement.

It would seem that drastic and very public action would be required — dismissals, immediate change of policy and procedures, and a public reaffirmation that Whole Foods means what it has always said it means. However, on the company’s website, one has to go to “blog” or “investor relations” to find out what they have done to remedy the situation. It’s not on the home page, and on the blog, it’s the second item down underneath “grilled pizza.” I believe a lot more needs to be done in a much more public way if Whole Foods is to preserve the image that has taken decades to build.

Arie Shpanya
Arie Shpanya
8 years ago

This is unfortunate for both shoppers and Whole Foods’ brand image. While all shoppers know that Whole Foods generally charges higher prices for high quality goods, this takes it to another level.

I don’t want to believe that Whole Foods has been knowingly been overcharging its customers, but having problematic scales would also be a bit ridiculous when it comes to such a well known grocer. This scandal could make shoppers weigh twice to make sure they’re paying a fair price, but, as others have mentioned, Whole Foods has a strong customer base that will keep on coming back.

Craig Sundstrom
Craig Sundstrom
8 years ago

It’s hard to tell much from the almost anecdotal nature of the DCA Press Release, though one commenter’s effort to compare the total of the sample’s discrepancies to the volume of the entire store makes no sense. And there’s always the possibility of headline grabbing, but if I were Whole Foods I wouldn’t make that argument. Complete and unqualified contrition is the only acceptable reaction. (“We’re only human and we’ll never let it happen again.”)

But does it matter? To the extent that people are aware of it, then yes, it will hurt a little, but right now it’s just a local NYC story, overwhelmed at the national level by joy (or condemnation) of the latest Supreme Court rulings, concern over “Grexit”, etc.

Ed Rosenbaum
Ed Rosenbaum
8 years ago

Whole Foods’ image in New York might be affected, but I am doubtful it has been affected in other areas. Our memories are too short and we are off to another issue.

I wonder why Whole Foods’ name was the only name mentioned. Could there be another agenda?

Brent Buttolph
Brent Buttolph
8 years ago

At a minimum, store level training and/or service department scale calibrations are certainly in order for the NY locations. Whole Foods is certainly not the first nor the last food retailer to fail such a government audit, but certainly a lesson learned that will likely drive more frequent cadence of self-monitoring across the chain.

One thing you can be certain of — one of the best retailers in the world at using social media to build an endearing consumer following is certainly cranking up the PR machine to monitor and tamp down consumer backlash quickly!

Joan Treistman
Joan Treistman
8 years ago

I think Whole Foods has to let shoppers know what is done to insure accuracy. Occasional spot checks might do the trick. Their brand image will survive overall, but they shouldn’t allow this wound to go untreated.