July 02--Top executives for Austin-based Whole Foods Market took a direct approach this week to address claims the organic foods giant overcharged some of its New York customers, taking to YouTube and promising to rectify the issue.
Co-CEOs John Mackey and Walter Robb admitted the overcharging mistake in a YouTube video, which had drawn more the 50,000 views as of Thursday.
"Straight up, we made some mistakes," Robb said in the nearly 2 minute video. "We want to own that."
Mackey and Robb said they were correcting the issue with several changes and would implement a 100 percent customer guarantee to refund shoppers the full price of an item when they find evidence they are overcharged. Mackey said the overcharging involved mostly fresh products such as fresh juices and cut fruit and said there is "a very, very small percentage" of impacted foods that are tied to "misweighing errors."
"We know they are unintentional because the mistakes are both in the customer's favor and sometimes not in the customer's favor," Robb said. "It's understandable sometimes mistakes are made. They are inadvertent. They do happen, because it's a hands-on approach to bringing you the fresh food."
Mackey said Whole Foods will increase worker training at stores in New York and elsewhere "because we want to be perfect," and will implement a new third-party auditing system to watch for overcharging errors.
The executives said they intend to issue a report within 45 days on what kind of progress they have made on correcting the matter.
Last week, the New York City Department of Consumer Affairs announced it uncovered evidence that there was "systemic overcharging for pre-packaged foods" at the city's Whole Foods stores.
Agency commissioner Julie Menin said this week they were "gratified" that Whole Foods admitted to the concerns.
"We are gratified that, as a result of our investigation, Whole Foods is admitting the deficiencies in how they label their pre-packaged foods and taking steps to ensure no New Yorker is overcharged," Menin said in a written statement. The agency "will remain vigilant and hold Whole Foods and other supermarkets accountable for any misleading and deceptive practices."
In its initial investigation, the agency said it found certain Whole Foods stores "routinely overstated the weights of its pre-packaged products -- including meats, dairy and baked goods -- resulting in customers being overcharged." It tested 80 types of pre-packaged products and "found all of the products had packages with mislabeled weights."
Also, 89 percent of the packages did not meet federally set standards on how much packages could deviate from actual weight, the agency went on to say. For example, the findings ranged from 80 cents more for a package of pecan panko to $14.84 extra for a package of coconut shrimp.
The agency's "findings point to a systematic problem with how products packaged for sale at Whole Foods are weighed and labeled," the agency said. "The snapshot suggests that individual packages are routinely not weighed or are inaccurately weighed, resulting in overcharges for consumers."
The mislabeled products included nuts, almonds, corn nuts, berries, vegetables and seafood, the agency said.
Fines for falsely labeled packages is $950 for the first violation, and up to $1,700 for subsequent violations, the agency said. Whole Foods could be facing thousands of dollars in fines, the agency added.
Similar claims have been made in California, where Whole Foods paid nearly $800,000 in penalties to resolve the matter.
Robb and Mackey said anyone with feedback and thoughts can email firstname.lastname@example.org and they would both personally read the notes and respond.
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