Safeway ordered to payout nearly $31 million for online overcharges
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Grocery chain Safeway must pay out $30.9 million to customers who overpaid for items purchased online, according to federal judgement passed down Monday.
In 2011, Michael Rodman filed a class action suit against Safeway, alleging that the grocery chain charged more for products bought online after the supermarket said customers would pay the same as in-store buyers.
Safeway argued that customers knew they were being overcharged and cited an online survey in which 1 in 7 customers said they were "dissatisfied" or "very dissatisfied" about it, reports Courthouse News.
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But the supermarket chain began marking up prices on web purchases in April 2010, despite its terms of service contract that online prices would not differ from in-store deals, according to the suit.
U.S. District Judge John Tigar found Safeway’s argument insufficient and has ordered the food retailer to pay for all mark-up prices on online goods purchased between 2006 and 2014—which Safeway calculated at $31.18 million.
Lawyers representing both Rodman and Safeway agreed to cut $209,000 from the estimate, resulting in a final payout of $30.9 million.
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"A customer's response that they were dissatisfied does not indicate that that customer knew of the existence of the markup or their right to price parity," Tigar wrote in his 30-page ruling. He also reprimanded the chain for “actively concealing its online price markups from the public.”