For release on October 10, 2012

CONTACT:
Tina Nunes-Ober, Deputy District Attorney
Consumer and Environmental Protection Unit
(408) 792-2598

RITE AID TO PAY $800,000 FOR FALSE ADVERTISING AND UNLAWFUL BUSINESS PRACTICES VIOLATIONS

The Santa Clara County District Attorney’s Office, along with District Attorneys’ Offices in Riverside and Ventura counties, has settled a civil law enforcement action with Rite Aid pharmacy, which has paid $800,000 in penalties, restitution and other costs for violating California False Advertising and Unlawful Business Practices laws.

Filed in San Diego County, the settlement resolves allegations that Rite Aid Corporation violated laws prohibiting false and deceptive advertising in its +Up Rewards and Wellness card advertising campaigns, as well as failing to redeem gift cards with a cash value of less than $10.

“This is a victory for all California consumers,” Santa Clara County prosecutor Tina Nunes-Ober said. “The law provides that advertising must be clear such that the consumer knows what he or she will pay for an item before making a purchase and it must not be deceptive.”

The complaint alleges Rite Aid advertisements conveyed to consumers that they would pay lower prices for items purchased using the Rite Aid Wellness+ Card.

Once at the register, the customer could not purchase the item at the advertised price. Instead, the customer received a printed coupon printed on the end of their receipt for savings on a future purchase. The coupon had an expiration date and other restrictions. The complaint alleges that Rite Aid failed to adequately inform consumers that the product could not be purchased at the advertised price. In the settlement, Rite Aid agreed to clearly display the program’s limitations and all the conditions necessary for customers to purchase items for advertised prices.

Rite Aid will also program their credit card terminals to inform the customer when their gift card has abalance of less than $10. The terminal will be prompted to ask the customer if he or she wishes to redeem the gift card for the cash balance.

Santa Clara County, home to 21 Rite Aid stores will receive $175,000 in civil penalties and be reimbursed $1,457 for the costs of the prosecution. Rite Aid will be bound by the terms of a permanent injunction prohibiting similar violations in the future.