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N.Y. AG Announces Agreement With Price Chopper To End ‘Deceptive Advertising Practices’

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New York Attorney General Eric T. Schneiderman said Tuesday that an agreement has been reached with Price Chopper that will require the Schenectady, N.Y.-based grocery store chain to change the way it advertises and promotes its coupons in New York State and pay a $100,000 penalty. The agreement, which is the result of an investigation by the Attorney General’s office, came about following complaints about misleading coupons issued by Price Chopper that failed to disclose restrictions. The changes to the grocer’s advertising practices will help shoppers make informed decisions about purchases, according to a news release from the Attorney General’s office.

“In the current economy, it is more important than ever that consumers be presented with clear information about the terms and conditions of coupons and other sale offers,” said Schneiderman. “Price Chopper used deceptive business practices to mislead price-conscious consumers and extract hard-earned money from them by hindering their ability to shop competitively and save on groceries. Today’s agreement ensures that consumers will be protected from misleading advertising at these stores in the future.”

Price Chopper released its own statement Tuesday, following the news release from the Attorney General’s office.

“We were appalled and disappointed by the inflammatory press release distributed earlier today by the New York State Office of the Attorney General (OAG), as its portrayal of Price Chopper’s conduct is false, misleading and inaccurate in significant respects, and is not supported by the Assurance of Discontinuance (AOD) to which Price Chopper agreed,” the statement says.

“In fact, contrary to the press release, the AOD makes no assertion that Price Chopper acted intentionally to harm consumers or that its practices caused any losses, let alone millions of lost savings to its consumers. We’ve been in direct contact with the OAG to express our concerns and are awaiting their response.”

At the time of this report, the news release remained posted on the Attorney General’s website.

“What the OAG actually asserts in the AOD is that Price Chopper inconsistently donoted in its advertising the dollar value limit of its double coupon policy during select weeks in June 2011, January 2012 and April 2012 in Syracuse and Cortland, N.Y.,” Price Chopper’s statement continues.

“Our decision to sign this agreement was reached after considering the likely cost of alternative actions, and because settling the matter will allow us to focus on serving our customers, including offering double coupons up to (99 cents) in all 130 of our stores.”

Schneiderman’s investigation revealed that Price Chopper advertised that it accepted double coupons at its store locations without disclosing important restrictions that applied to that policy, according to the release.

After implementing a corporate-wide policy that limited the doubling of coupons “up to 99 cents,” Price Chopper failed to disclose this restriction in its advertisements leading consumers to believe that $1 coupons would be doubled, the release says. Prior to this corporate policy, Price Chopper’s double coupon policies had previously varied from store to store. A number of stores doubled coupons up to $1 whereas others restricted the face value of coupons that could be doubled, the release says.

“Coupons draw consumers into stores with valuable offers, leading to the purchase of other goods. Restrictions on double coupons, which can make a significant difference in savings, must be clear to consumers who shop on a budget,” the release says.

In April and May of 2012, Price Chopper shoppers redeemed 34,616,602 coupons valued at 99 cents or greater; approximately eight million of these were valued at $1 or more, the release says.

Under the terms of the agreement announced Tuesday, Price Chopper is required to clearly and conspicuously disclose any face value limits on coupon redemption. In addition to changing advertising practices, Price Chopper agreed to pay $100,000 in civil penalties and costs to the state.

In New York State, Price Chopper has 79 stores statewide, with locations in the Capital Region, Utica, Syracuse, Binghamton, the North Country and the Mid-Hudson Valley.

 

 

 

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