BIZ BEAT: One-Fourth Of Stores Caught Overcharging Customers

NOTE: The following story first appeared on WISC-TV. I used state data to find a disturbing problem: inspectors caught more than 100 local stores overcharging their customers in 2011.

MADISON, Wis. — One out of every four Wisconsin stores inspected for price accuracy failed the test, with some paying hefty fines and their customers on the hook for overcharges, a WISC-TV investigation found.

State inspectors tested bar code scanners at 745 stores last year, and about 27 percent charged the incorrect price on multiple items, according to data from the state Department of Agriculture, Trade and Consumer Protection. The percentage of failing stores in Dane County was slightly better but, still, one-fifth of stores got more than one out of 50 prices wrong.

Given an opportunity during a second inspection, most stores improved their scores. But consumer advocates still criticized the mistakes.

“People don’t look out for us anymore, so we have to look out for ourselves,” said Dannelle Gay, a Sun Prairie shopper who’s turned coupon-clipping advice into an online business. “Right now, everyone’s money is so precious to them. You really have to pay attention to where you’re spending it.”

The state employs 15 inspectors, while larger cities, such as Madison, have their own. The state targets heavy-traffic businesses, such as department stores and grocery stores. Madison’s inspector visits stores both big and small.

Jared Williams, a DATCP employee, does price accuracy checks in Dane and Iowa counties. He shows up at stores unannounced and chooses 50 items at random, scanning them in as he goes along. By verifying them at the cash register, he produces a report immediately for the store manager.

Anything worse than 98 percent success — two or more incorrect prices — is considered failure, Williams said.

“Some stores might think we’re only out here to protect the consumer, but we’re not,” Williams said. “We’re here to protect the businesses as well.”

State inspector Jared Williams checks items at a Monona store.

State inspectors perform a retest on failing stores, many of which correct overcharges and get the items back on the shelf, Williams said. Those that don’t face fines, and the state collected more than $50,000 in 2011 from repeat offenders, according to DATCP data.

The list includes the NAPA Auto Parts store in Oregon, which paid $4,662 as a result of overcharging customers on the same seven items without fixing the mistakes. The owner, Troy Halverson, told WISC-TV in a phone conversation that he wasn’t in town when the inspector came through.

The state fined Wisconsin CVS Pharmacy $93,332 in 2010, and Walgreen Co. a total of $80,226.50 the year before that, according to the DATCP data.

“They don’t want to go down that path,” Williams said. “They don’t want to end up getting fined, and we don’t want to go that far, either.”

In all, 201 stores across the state failed at least one inspection last year. In Madison, 115 of 416 stores inspected didn’t pass on the first try, with overcharges ranging from pennies to dollars.

Gay, who doles out shopping tips on her blog, www.operation40k.blogspot.com, said customers have the final say when it comes to repeat offenders.

“Your best vote as a consumer where you’re spending your money is where you spend it,” she said. “If you stop shopping at a place, they figure it out pretty quick.”

Some stores are trying to help consumers, at the same time helping themselves avoid fines. The Piggly Wiggly in Cottage Grove failed a state inspection last March, missing three out of 50 items, or 6 percent. Owner David Schommer blamed the mistake rate on human error.

“My first feeling was, I need to talk to my scan coordinator here to find out why we’re having so many problems,” Schommer said. “We put a better plan into effect, as far as we spent more hours checking our store for wrong pricing.”

He said he’s having employees spend more time checking pricing on the shelves, now about 56 hours per week. It’s costing the store more in employee overtime, but it’s worth it, Schommer said. The store had a positive re-inspection about two months later, data indicate.

“It’s a continual thing every week to make sure we’re keeping the prices correct,” Schommer said. He, too, advised customers to check their receipts.

State DATCP inspectors don’t check every store because there are simply too many, but they do investigate complaints within two weeks, Williams said.

“You try to get out there and do as much as you can,” he said of his job. “Obviously, you’re probably not going to hit every single thing every single year. But you get as much done as you can, and if you don’t get something one year, try to get it the next year.”