Caleb Haley bought a pint of Ben & Jerry’s ice cream at Safeway in one of the grocery giant’s “Buy One, Get One Free” promotions, paying $7.49. The same tub cost $4 the day before the deal started and dropped back down to that price immediately after it ended.
Alleged promotional pricing practices like these by the nationwide grocer are deceptive and illegal, according to a lawsuit Haley filed this week, claiming nearly a million California consumers have been harmed.
At its 243 California stores, including dozens in the Bay Area, Safeway illegally jacks up prices on food sold in the “BOGO” and “Buy One, Get Two Free” promotions, the lawsuit in Northern California U.S. District Court claimed, contending that California’s unfair-competition and false-advertising laws make such practices illegal.
“Consumers making purchases under these promotions do not get a free product,” the lawsuit against Safeway and its parent firm Albertsons alleged. “Instead, they pay more for the product and buy more of the product than they otherwise would to obtain the illusory ‘free’ product.”
More than 800,000 California shoppers have been duped by the alleged scheme, the lawsuit claimed, and Haley, a Eureka-area resident, is seeking class-action status to bring them into the legal action.
Albertsons did not respond to requests for comment.
According to the lawsuit, Haley bought the ice cream in April. Between March and May, Safeway also allegedly raised a number of prices on BOGO deals. A package of Gorton’s frozen fish went from $8.99 to $11.99, while Peet’s Coffee went from $8.99 to $13.99, and Oreos cookies went from $4.99 to $6.79, the lawsuit claimed. Safeway also was accused of hiking the price of other ice creams for a BOGO promotion, from $4 to $7.49 for Dreyer’s and from $5.99 to $7.49 for Häagen-Dazs.
The lawsuit also cites U.S. Federal Trade Commission guidance that companies offering free goods should take “extreme care so as to avoid any possibility that consumers will be misled or deceived.”
The boosted pricing alleged in the lawsuit appears to contradict the agency’s regulatory guidance, saying, “when the purchaser is told that an article is ‘Free’ to him if another article is purchased, the word ‘Free’ indicates that he is paying nothing for that article and no more than the regular price for the other.
“Thus, a purchaser has a right to believe that the merchant will not directly and immediately recover, in whole or in part, the cost of the free merchandise or service by marking up the price of the article which must be purchased.”
The lawsuit aims to include the estimated 800,000-plus Safeway customers who used their membership in the grocer’s loyalty program to avail themselves of such promotions in the past four years.
Haley is seeking unspecified damages and a court order barring Safeway from “inflating the prices of products offered on BOGO promotions above the regular retail price for those products.”
Earlier this year, Safeway agreed to pay $107 million to settle a class-action lawsuit in Oregon that made similar claims about BOGO and “Buy One Get Two Free” promotions for certain meat products. Eligible consumers were to receive up to $200 each.
In 2014, Safeway agreed to pay more than $2 million to settle a lawsuit by Marin County prosecutors alleging it charged consumers more than its lowest advertised prices, misrepresented the weights of Safeway-brand products, and implied that some produce was locally grown when it came from out of the country.
In September, the company agreed to pay $8 million after authorities accused it of breaking gasoline-leak prevention laws at its 71 California gas stations, including 18 in the Bay Area.
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