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Message from the Attorney General

July 12, 2006

Terry Goddard, Arizona Attorney General
terry goddard

Accurate Pricing is the Law

Few things are more important to consumers than to know the price of products they buy and to have confidence they are being charged correctly when they check out.

Accurate pricing is not only fair, it's also the law.  I filed lawsuits last week charging Wal-Mart and AutoZone with consumer fraud to uphold that law.

Our suits allege a consistent practice of overcharges at the cash register, as well as failure to post shelf prices on many products.  When prices are not posted clearly, as required under Arizona law, consumers are unable to compare prices or know if they are charged accurately at checkout.

This ground-breaking litigation against two of the nation's retail giants has gained international attention.  Michigan settled a pricing case against Wal-Mart for $1.5 million earlier this year, and Connecticut is currently investigating the company's pricing accuracy.  But, no other state has gone to court with a case this extensive against two leading retailers for repeated price violations.

Some people have asked why we chose to sue these companies.  Several others have also failed repeated pricing inspections done by the Arizona Department of Weights and Measures.  The answer is that these two companies had the worst records of compliance over the last five years, and both are national leaders in their respective markets – Wal-Mart is the nation's biggest retailer and AutoZone is the number one auto parts retailer.  Wal-Mart has 82 stores in Arizona and AutoZone has 90.  As industry leaders, they have more than adequate resources to fix their pricing problems and should set the standard for compliance with the law.

Since 2001, both companies have failed over half of the Arizona Department of Weights and Measures’ pricing inspections.  Of the 976 inspections of Wal-Mart stores conducted by the state across Arizona, the company failed 526 of them.  AutoZone stores were inspected 846 times during the same period and failed 426 times.  A failed inspection occurs when a store exceeds a 2 percent error rate.

Neither company has contested the inspection results.  They have been willing to pay repeated fines – totaling $450,000 for Wal-Mart and $170,000 for AutoZone – rather than change their business practices to comply with the law.  I finally reached the inescapable conclusion that they regarded the fines as a cost of doing business in Arizona rather than invest in changing their behavior.

I hope our lawsuits change that attitude and get these companies on track to obey the law and respect Arizona consumers.  Arizona law calls for fines of up to $10,000 per price violation.  The companies face penalties that could reach into millions of dollars if the violations charged are affirmed by the court.

Wal-Mart has responded to its lawsuit by saying the company "is committed to comply with the law in every state in which it does business, including laws on pricing accuracy."  That’s a promising start.  Arizona consumers have a right to prices that are posted clearly and scanned correctly.

Terry

Terry Goddard

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