False advertising has landed the nation's largest retailer in hot water with New York State. Wal-Mart, as part of its settlement, will pay thousands of dollars in penalties.
An investigation by the office of Attorney General Eric Schneiderman found Wal-Mart's national Father's Day circular advertised 12 packs of Coca-Cola for $3.00, but in Wal-Mart's 117 stores across New York customers were charged $3.50.
"One of our investigators, from my office, was in a check-out line at Wal-Mart and overheard people discussing a fraud that was being committed on customers," Schneiderman told reporters.
"They were pretending that the price was inflated beyond the sale price of a product, because they claimed, New York had a sugar tax which we don't have."
In the Buffalo area, according to Schneiderman, one customer was told by Wal-Mart staff that the national ad did not apply in New York State. The big-box retailer agreed to pay a $66,000 penalty.
Schneiderman says most importantly Wal-Mart is adopting new procedures and has agreed to monitoring by his office.
"The fear is not just that they cheat on one sale. The fear is that they were cheating on many sales."
Investigators found that Wal-Mart ran the same deal in March. A company spokesman says Wal-Mart is enhancing its procedures to ensure proper promotional pricing.