Deceptive Pricing Practices: A Retail Analysis

Key Points
Research suggests deceptive pricing, like misleading discounts, is fairly common in retail, especially in grocery stores.
Studies show pricing errors occur in about 3-4% of transactions, with overcharges less frequent than undercharges.
Legal cases and consumer reports indicate deceptive practices are prevalent, particularly in certain regions like California.
There is controversy, with retailers disputing claims and unions advocating for better oversight.
Prevalence in Retail
It seems likely that deceptive pricing practices, such as overcharging or misleading discounts, are relatively common in retail, particularly in high-volume sectors like grocery stores. Studies on pricing accuracy suggest that while overall error rates are around 3-4%, intentional deceptive practices like fake discounts are harder to quantify but appear significant based on consumer complaints and legal actions. For example, a 2022 study by Consumers’ Checkbook found most “discounts” at major retailers were misleading, not genuine .
Regional and Industry Variations
The evidence leans toward deceptive pricing being more common in certain regions, with 64.8% of U.S. cases since 2014 in California, and states like New Jersey and Oregon also seeing frequent issues. It’s not limited to groceries; retailers like Walmart have faced lawsuits for overcharging, suggesting a broader industry trend .
Controversy and Consumer Impact
There’s debate, with retailers like Kroger disputing claims of systemic issues, while unions like UFCW Local 7 argue understaffing exacerbates pricing errors. This affects consumers, especially during inflation, with reports of overcharges averaging 18.4% per item in some cases, highlighting the need for vigilance .
Investigation into the Prevalence of Deceptive Pricing in Retail as of May 21, 2025
This report provides a comprehensive examination of the prevalence of deceptive pricing in the retail industry, focusing on practices such as misleading discounts, overcharging, and incorrect shelf tags, as highlighted by recent investigations into Kroger-owned King Soopers and broader retail trends. The analysis integrates findings from academic studies, consumer reports, legal cases, and industry insights, offering a detailed understanding of the issue as of the current date.
Context and Background
Deceptive pricing refers to intentional practices where retailers mislead consumers into believing they are getting a better deal than they actually are, often through tactics like fake discounts, bait-and-switch schemes, or overcharging at checkout compared to advertised prices. This issue gained attention with an X post from UFCW Local 7 on May 15, 2025, titled “Investigation Confirms Kroger-owned King Soopers’ Chronic Understaffing of Stores Has Led to Deceptive Pricing for Consumers” . The post detailed how understaffing led to pricing discrepancies, violating Colorado consumer protection laws, and is part of broader labor disputes, including strike authorizations and lawsuits by the Colorado Attorney General.
King Soopers, operating in Colorado and Wyoming, is a subsidiary of Kroger, with UFCW Local 7 representing over 15,000 workers. The union has linked understaffing to operational challenges like expired sales tags, confirmed by Consumer Reports’ findings since January 2025, which found overcharges averaging 18.4% per item due to pricing errors Kroger Stores Overcharging Shoppers.
Prevalence of Pricing Errors and Deceptive Practices
Research on pricing accuracy in retail, particularly in grocery stores using scanners, provides insight into the frequency of pricing errors. A 1998 study by Clodfelter, published in the International Journal of Retail & Distribution Management, checked 146,518 items in over 2,000 stores across nine states and found a price accuracy rate of 96.13%, implying a 3.87% error rate. It noted that undercharges occurred more frequently than overcharges, with grocery stores showing higher accuracy compared to other retail stores . Another study, also from Emerald Insight, examined pricing accuracy over a four-year period and reported an error rate of 3.86%, with overcharges at 1.65% and undercharges at 2.21% . A ScienceDirect study over 15 years found similar low error rates but emphasized their impact on consumer trust .
While these studies focus on accidental errors, deceptive pricing involves intentional tactics. A 2022 report by Consumers’ Checkbook, cited by Darrow.ai, tracked sale prices at 24 major retailers for 33 weeks and found that most “discounts” were misleading, not genuine, suggesting deceptive pricing is more common than realized . Brain Corp’s recent analysis indicated over half of all stores had mismatches between labeled and scanned prices, with independent retailers at 69%, and cited a case where a major retailer faced an $850,000 settlement in Wisconsin for overcharging .
Specific Cases and Legal Actions
Legal cases underscore the prevalence of deceptive pricing. For instance, a 2022 lawsuit against Walmart in Niles, Illinois, alleged overcharging by 10-15% on certain items, indicating a broader trend Kroger accused of price discrepancies. Darrow.ai noted that 64.8% of U.S. deceptive pricing cases since 2014 were in California, with common states including New Jersey, Oregon, Washington, and Illinois. A specific example is Michelle Cortez Gomez vs. Kohl’s, a class action in Wisconsin for misleading reference prices, with a 29-page complaint detailing the issue . Another case involved an international tourist attraction operator affecting 330,000 victims, resulting in $16.5 million in damages, highlighting the scale of impact.
Consumer complaints and reviews further corroborate this. Platforms like WorthEPenny and PissedConsumer reported issues at King Soopers, with customers noting overcharges requiring returns to customer service, and one review mentioning a rat in the pharmacy area, indicating broader operational issues (Check King Soopers Ratings, 321 King Soopers Reviews).
Industry-Wide Trends and Regional Variations
Deceptive pricing is not limited to grocery stores. Online retailers also face issues, with pricing glitches due to technical errors or human mistakes, as seen in examples like Amazon’s 2014 glitch listing products for $0.01 . The practice exploits psychological triggers like scarcity and loss aversion, occurring in both brick-and-mortar and e-commerce, often more frequent than realized .
Regionally, California’s high case rate suggests a concentration, but state laws vary in enforcement. Michigan offers a 10x bonus for overcharges, New Jersey fines $50-$100 per violation, and Connecticut requires refunds of overcharges or $20, whichever is greater, reflecting efforts to combat deceptive pricing (The Price Must Be Right, US Retail Pricing Laws, Michigan Pricing Laws, New Jersey Pricing Compliance, Connecticut Pricing Statutes).
Impact on Consumers and Retailers
Deceptive pricing affects consumers, especially during inflation, with Consumer Reports finding overcharges averaging $1.70 per item, or 18.4%, impacting shoppers on fixed incomes Kroger Stores Overcharging Shoppers. For retailers, it can lead to fines, as seen in New Jersey (up to $100 per incorrectly marked item) and North Carolina (up to $5,000 per violation), and damage to reputation (The Price Must Be Right, North Carolina Pricing Laws).
Table: Summary of Key Findings on Pricing Errors and Deceptive Practices
Aspect
Details
Study Source
Clodfelter (1998), Emerald Insight, ScienceDirect, Brain Corp
Pricing Error Rate
3-4%, with overcharges at 1.65-2%, undercharges more frequent
Deceptive Pricing Prevalence
Consumers’ Checkbook (2022): Most discounts misleading at 24 retailers
Legal Cases
64.8% in California since 2014, e.g., Walmart, Kohl’s lawsuits
State Fines
Michigan: 10x bonus; NJ: $50-$100 per violation; NC: up to $5,000
Consumer Impact
Overcharges average 18.4%, affecting fixed-income shoppers
Union Advocacy and Broader Implications
UFCW Local 7’s X post emphasized their role in advocating for workers and consumers, demanding accountability from Kroger and King Soopers . They highlighted ongoing labor disputes, including a strike authorization and lawsuit by the Colorado Attorney General, noting Kroger’s $2 billion profits while cutting jobs and hours, exacerbating understaffing. The proposed Kroger-Albertsons merger raises concerns, with fears of further consolidation worsening pricing and staffing issues.
Comparative Analysis
This issue isn’t unique to Kroger; a 2022 lawsuit against Walmart in Niles, Illinois, alleged overcharging by 10-15%, indicating a broader trend in U.S. grocery chains Kroger accused of price discrepancies. Consumer advocate Edgar Dworsky emphasized shoppers’ reliance on accurate shelf prices, calling it a “big problem” Kroger Stores Overcharging Shoppers.
Conclusion
The evidence suggests deceptive pricing is a significant and fairly common issue in retail, with pricing errors occurring in about 3-4% of transactions and intentional deceptive practices like misleading discounts being prevalent, especially in grocery stores and certain regions like California. While retailers dispute systemic issues, consumer reports and legal actions highlight the need for transparency and accountability. This issue, part of broader industry trends, underscores the importance of consumer vigilance and regulatory enforcement to protect shoppers.
Key Citations
Pricing Accuracy at Grocery Stores and Other Retail Stores Using Scanners
An Examination of Pricing Accuracy at Retail Stores That Use Scanners
The Accuracy of Scanned Prices
The Price Must Be Right: Your Guide to Legal Price Compliance in Retail
Deceptive Pricing: How to Spot It & Fight Back
Deceptive Pricing Overview and Legal Impact
Kroger Stores Overcharging Shoppers on Sale Items, CR Price Check Finds
Kroger Accused of Price Discrepancies by Consumer Reports
Check King Soopers Ratings and Customer Reviews
321 King Soopers Reviews at PissedConsumer
US Retail Pricing Laws and Regulations by State
Michigan Retail Pricing Laws and Regulations
New Jersey Retail Pricing Compliance Information
Connecticut General Statutes on Consumer Protection Pricing
North Carolina Retail Pricing Statutes
UFCW Local 7 Investigation Confirms Kroger-owned King Soopers’ Chronic Understaffing
What are Pricing Errors? Common Causes and Examples