Department of Consumer Affairs Investigation Uncovers Systemic Overcharging for Pre-packaged Foods at City's Whole Foods

Department of Consumer Affairs (DCA) Commissioner Julie Menin today announced an ongoing investigation into Whole Foods after finding that the company’s New York City stores routinely overstated the weights of its pre-packaged products – including meats, dairy and baked goods – resulting in customers being overcharged. DCA tested packages of 80 different types of pre-packaged products and found all of the products had packages with mislabeled weights. Additionally, 89 percent of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight, which is set by the U.S. Department of Commerce. The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.

DCA’s findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled. The snapshot suggests that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers. The overcharges were especially prevalent in packages that had been labeled with exactly the same weight when it would be practically impossible for all of the packages to weigh the same amount. These products included nuts and other snack products (flavored almonds, pecan panko and corn nuts), berries, vegetables, and seafood. In some cases, this issue was found for the same exact products at multiple stores.

Several examples of overcharges include:

• DCA inspected eight packages of vegetable platters, which were priced at $20/package. Consumers who purchased these packages would have been, on average, overcharged by $2.50—a profit of $20 for the eight packages. One package was overpriced by $6.15.
• DCA inspected eight packages of chicken tenders, which were priced at $9.99/pound. Consumers who purchased these packages would have been, on average, overcharged by $4.13—a profit of $33.04 for the eight packages. One package was overpriced by $4.85.
• DCA inspected four packages of berries, which were priced at $8.58/package. Consumers who purchased these packages would have been, on average, overcharged by $1.15—a profit of $4.60 for the four packages. One package was overpriced by $1.84.

“It is unacceptable that New Yorkers shopping for a summer BBQ or who grab something to eat from the self-service aisles at New York City’s Whole Foods stores have a good chance of being overcharged,” said DCA Commissioner Menin. “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. 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.”

DCA regularly inspects all of the city’s supermarkets for scanner and scale accuracy, pricing, and charging tax on non-taxable items. Last fall, DCA conducted in-depth inspections into how Whole Foods was weighing and labeling its pre-packaged foods and discovered troubling issues with their labeling of the weight of pre-packaged foods. This winter, DCA revisited several stores and found products continued to be mislabeled. DCA’s expanded investigation will further evaluate the company’s compliance with City and state laws. To date, DCA’s inspections have focused on the eight stores that were open during the time of inspections. There are currently nine Whole Foods stores in New York City and they reportedly have plans to open an additional location in Harlem. Nationally, the chain is rapidly expanding and also recently announced that it plans to open a lower-priced chain called 365 by Whole Foods Market.

The fine for falsely labeling a package is as much as $950 for the first violation and up to $1,700 for a subsequent violation. The potential number of violations that Whole Foods faces for all pre-packaged goods in the NYC stores is in the thousands.

An investigation in California, which began in 2012, also found pricing irregularities in the state’s Whole Foods stores. City Attorneys for Santa Monica, Los Angeles, and San Diego brought a civil consumer protection case on behalf of the people of the State of California. As a result of that case, Whole Foods agreed to pay close to $800,000 in penalties and initiate a stringent in-house pricing accuracy effort that included a statewide compliance coordinator, a designated employee at each location for pricing accuracy, and random audits.

For tips on shopping at the supermarket (en español) or to file a complaint about Whole Foods or any other supermarket, visit nyc.gov/consumers or call 311.

The Department of Consumer Affairs (DCA) licenses, inspects, and educates businesses, mediates complaints, educates consumers, and offers free financial counseling and safe banking products. DCA enforces the Consumer Protection Law, the Paid Sick Leave Law and other related business laws throughout New York City and licenses nearly 80,000 businesses in 55 different industries. Through targeted outreach, partnerships with community and trade organizations, and informational materials, DCA educates consumers and businesses alike about their rights and responsibilities. DCA’s Office of Financial Empowerment assists low-income New Yorkers with innovative programs and services to increase access to high-quality, low-cost financial education and counseling, safe and affordable mainstream banking, and access to income-boosting tax credits and savings. For more information, call 311 or visit DCA online at nyc.gov/consumers or on its social media sites, Twitter, Facebook, Instagram and YouTube.

• Check your receipt. Most supermarkets use scanners to ring products up at the register, but just because there is a computerized system, that doesn’t mean it’s always accurate. Always review your receipt to make sure you were charged the advertised price, for the correct number of items, and that you weren’t charged tax on non-taxable goods such as medicines and many foods. Visit the NYS Department of Taxation for a list of what items can’t be taxed.
• Hold the store to its advertising. Ads must be truthful. If you see an ad, then the store must have the brand, variety and size of the item as advertised and any purchase restrictions must be stated in the advertising and not added on later in-store. Stores must honor their advertised prices and have reasonable quantities of the advertised goods available. If an item is out of stock, ask for a raincheck so you can buy it later at the sale price.
• Check the scales. Each scale in the store must have an up-to-date DCA sticker on it, certifying that it has been inspected and judged to be in working order. Scales must start at zero and come to rest before you are quoted a weight and or a price. Make sure the store doesn’t overcharge you and deducts the weight of the empty packaging.
• Weigh your packaged goods. Supermarkets sell a lot of store-packed foods, like nuts, or fruits in packaging, or pre-packaged meats and those goods must have a label on them with product identity, net weight, and name and address of distributor. The market must also provide a scale within 30 feet of the section where those goods are sold, or a sign directing you to the nearest scale. That way you can check that you are being charged an accurate price for the weight of the item you are buying.
• Look for prices. The item price must be on an individual label, stamp or tag on the item itself. There are some exceptions to this rule, including tobacco, bulk food, eggs, fresh produce, milk and items on sale for seven days or fewer. The unit price – meaning the cost per pound, pint or other unit of measure – must be listed on the shelf near most products.
• Make a shopping list, check for sales and coupons, and comparison shop. You can save time and money if you know what you need and shop for the best price. Having a list will make you less likely to be tempted while you’re shopping and help you stick to your budget. There are a lot of coupons available online and by using smartphone apps, you might even be able to find some items online for less and save yourself a trip.

MEDIA CONTACT: Connie Ress / Abigail Lootens
Department of Consumer Affairs
(212) 436-0042
press@dca.nyc.gov