Home Depot (NYSE:HD) has agreed to a settlement of almost $2 million to resolve allegations that it overcharged customers at checkout.
What Happened: The lawsuit, filed by prosecutors from six California counties, accused the retailer of “scanner violations,” where the prices at checkout were higher than the advertised prices. The case was brought to the San Diego County Superior Court, reported NBC News.
In a statement, Home Depot said it has updated the timing of its price changes to ensure consistency for customers. The settlement, which does not admit any wrongdoing, was approved by Judge Richard Whitney and filed on Aug. 26.
Los Angeles County District Attorney George Gascón stated that the price discrepancies were not accidental and accused the company of deceptive practices. The settlement includes $1.7 million for consumer law enforcement across several counties and additional funds for consumer regulators and watchdogs.
Under the agreement, Home Depot must always use the lowest posted prices, hire an internal price watchdog, assign price accuracy checks to store managers and make price accuracy records available to prosecutors.
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Why It Matters: This settlement comes at a time when Home Depot is already grappling with various challenges. Recently, the company’s CEO Ted Decker highlighted that inflation is eroding disposable income, causing many homeowners to delay renovations and repairs. This economic strain has been reflected in the company’s financial performance.
In its latest earnings report, Home Depot posted a modest sales growth of 0.6% year-over-year, falling short of Wall Street expectations. Analysts have since lowered their price forecasts for the company, citing a weaker consumer outlook.
Moreover, the retail giant has been trying to boost sales by introducing holiday merchandise earlier than usual, aiming to counteract potential slowdowns in consumer spending due to economic uncertainties and the upcoming presidential election.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
