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Whole Foods under investigation for overcharging in NYC

A Whole Foods in Manhattan’s Union Square. (Julie Jacobson/AP)
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Its nickname is “Whole Paycheck” — but Whole Foods’ high prices were generally thought to be part of its luxury mystique, not wrongdoing or mislabeling.

But now that New York City’s Department of Consumer Affairs (DCA) is investigating the grocery chain for “systemic overcharging for pre-packaged foods,” that may change.

“It is unacceptable that New Yorkers shopping for a summer BBQ or who grab something to eat from the self-service aisles at New York City’s Whole Foods stores have a good chance of being overcharged,” said DCA Commissioner Julie Menin in a statement. “Our inspectors tell me this is the worst case of mislabeling they have seen in their careers, which DCA and New Yorkers will not tolerate.”

[America’s greatest political divide: Whole Foods vs. Cracker Barrel?]

Whole Foods — with nine stores in New York City already and one coming to Harlem — didn’t exactly deny the charges but said any overcharges were not intentional.

“Because we always strive to satisfy and delight our customers, it has always been our policy to fully refund any items found to have been incorrectly weighed or priced,” Whole Foods said in a statement e-mailed to The Washington Post. “We assure our shoppers that we’ve NEVER intentionally used deceptive practices to incorrectly charge customers. Due to the ongoing nature of this matter, we have no further comment other than to say we disagree with the findings and we’re vigorously defending ourselves against allegations to the contrary.”

The agency said it tested 80 different kinds of prepackaged products at New York Whole Foods outlets and found all had mislabeled weights. The U.S. Department of Commerce says a package can deviate from its stated weight by only so much, according to DCA; 89 percent of the packages DCA tested did not meet this standard.

The DCA’s conclusion: “New York City stores routinely overstated the weights of its pre-packaged products — including meats, dairy and baked goods — resulting in customers being overcharged.”

One notable alleged overcharge: an extra $14.84 for a package of coconut shrimp. But the shrimp wasn’t the only problem. The DCA offered other specific examples:

  • The DCA inspected eight packages of vegetable platters, which were priced at $20 per package. Consumers who purchased these packages would have been, on average, overcharged by $2.50 — a profit of $20 for the eight packages. One package was overpriced by $6.15.
  • The DCA inspected eight packages of chicken tenders, which were priced at $9.99 per pound. Consumers who purchased these packages would have been, on average, overcharged by $4.13 — a profit of $33.04 for the eight packages. One package was overpriced by $4.85.
  • The DCA inspected four packages of berries, which were priced at $8.58 per package. Consumers who purchased these packages would have been, on average, overcharged by $1.15 — a profit of $4.60 for the four packages. One package was overpriced by $1.84.

“DCA’s findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled,” the agency said in a statement. “The snapshot suggests that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers.”

Digging deeper into overpricing allegations, the New York Daily News reported that Whole Foods was not the only alleged culprit. The DCA’s investigation included 120 grocery stores across the city; 77 percent were cited for violations.

Whole Foods, however, stood out. Records obtained by the Daily News told the tangled tale.

“Overall, the city’s Whole Foods stores have received more than 800 violations during 107 separate inspections since 2010, totaling more than $58,000 in fines, a Daily News analysis of data obtained via a Freedom of Information Law request shows,” according to the newspaper.

All the city’s outlets were not created equal, it seems.

“The Columbus Circle location has the dubious distinction of being hit with the most pricing violations in the entire city — 240 during 28 inspections dating back to 2010,” the Daily News found. “… The violations range from failing to display prices to overcharging at the scanner and adding tax to items that are not taxable under state law.”

Nor is this the first time Whole Foods has faced charges of overcharging. After a similar investigation in California in 2012, the company paid $800,000 in penalties, the DCA said.

Problems with weight labels on foods, however, can have an upside for consumers: undercharging. The Daily News said it went shopping at Tribeca’s Whole Foods earlier this week and stumbled onto a discount.

“Mini roast beef sandwiches were all priced at $3.49 for 3 ounces, despite their varying weights, from 4.5 to 5.1 ounces,”  the newspaper reported. “Similarly, breaded chicken breasts were all priced at $5.99 for 7 ounces, even though the actual weights ranged from 6 to 9.2 ounces.”

Weight labeling at markets, it seems, is an inexact science. One food industry representative blamed those who make products, not those who sell them.

“Because of the volume of product that gets produced unintentional mistakes are made,” Jay Peltz, general counsel and vice president of government relations for the Food Industry Alliance of New York, told the Daily News. “… If a product is delivered to a store pre-packed and pre-sealed and pre-labeled the retailer does not have control over the packaging and weighting. It’s not the retailer — it’s the manufacturer that packed the product.”

More about Whole Foods:

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Whole Foods is learning that millennials aren’t who it thought they are

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