Undercover shoppers ring up retailers

“Buyer Beware” supervisor Katherine Takata outside a Sur La Table store at The Grove that overcharged.

“Men’s Shorts Now $49.50.” The sign at the J. Crew was clear. But when the knee-length summer pants were rung up last year on a Tuesday morning, the scanner read $64.50.

It was a costly mistake—for the merchant. The “shopper” was an inspector from the county’s “Buyer Beware” program, and the $15 error, along with a mistake in the store’s favor on a pair of T-shirts, added up to a misdemeanor. Now, more than $3,200 in fines and investigative costs later, Mother’s Day bargain hunters will find a different eye-catching sign in that J. Crew, in Glendale’s Americana at Brand shopping center.

“Notice of Overcharge Conviction,” it says.

Signed by the county’s Agricultural Commissioner/Director of Weights and Measures, the 8½-by-11-inch notices have quietly become a part of L.A.’s shopping landscape in the decade since the county first began mandating their display.

Today, the county has 16 full-time inspectors working on price verification, funded by some $2 million a year in fees, says Deputy Sealer of Weights and Measures Katherine Takata, who oversees the program. Inspectors have found overcharges everywhere from supermarkets and drug stores to the handbag department of the Beverly Hills Neiman Marcus, where, in late 2011, scanners were caught charging $990 for a Prada handbag that was supposed to be on sale for $910.

Some inspectors visit retailers as anonymous shoppers or respond to consumer complaints; others show up unannounced and conduct annual spot checks.

Diplomacy also is part of the job for the inspectors, who, like traffic cops, never know what they’ll encounter.

“People cry,” Takata says. “People get angry. We’ve had people try to hug us if they pass the inspection. Someone fainted once when the inspector identified herself. Another time, an inspector asked a store manager in the Beverly Center for an ID and the man excused himself and came back a half-hour later, all sweaty—he’d run all the way back to his house to get it.”

The job does have its entertaining moments.

“We’ve had celebrity sightings,” she says. “We’ve been in store parking lots during shootings. One of our inspectors was at a Victoria’s Secret once, checking prices, and one of the clerks asked him if he wanted a changing room.” Two inspectors once foiled a robbery at a Rite-Aid by blocking the exits, she says, and several undercover inspectors have themselves been mistaken for shoplifters.

When the inspections pay off, however, they can yield serious victories for consumers. Early this year, for instance, the legwork of L.A. County inspectors helped win a multi-county, $875,370 ruling against Best Buy. As part of the settlement, the retailer has to give California customers a $3 discount if they discover any more erroneous charges.

“Most overcharges occur because of human error—things like expired price tags not being taken down or updated in the system,” Takata says. “Sometimes it’s just a regularly priced item sitting on their shelf, and you bring it to the cash register and it rings up incorrectly. Sometimes it’s clearance items that haven’t been marked properly in the system.”

Innocent as the errors may be, however—the store manager at the J. Crew cited a computer malfunction when a routine spot check turned up those overcharges—the state holds retailers responsible for the accuracy of their prices. State law forbids merchants to charge more than the lowest price advertised.

Overcharges of less than $1 are infractions, carrying fines of up to $100 per violation, but overcharges of more than $1 can be prosecuted as misdemeanors, with penalties of up to $1,000 per violation.

“It may seem like a small thing,” says Takata. “But for, say, a retiree on a fixed income, even a dollar is significant. And for big companies like Ralph’s or Best Buy, these fines are a drop in the bucket. These overcharges add up. When Macy’s overcharges by dollar for a tie, it isn’t just that one tie and that one dollar. It’s all the people who buy that tie at Macy’s.”

Last year, she says, the program collected nearly $271,000 in fines from misdemeanor prosecutions, nearly $67,000 for investigative costs and nearly $99,000 in civil administrative penalties. At the moment, she says, notices are fluttering from the doorways of about 80 retailers across the county.

Over the years, Takata adds, those signs have been a special source of consternation for some merchants, who complain that they deter business. Because they are specifically written into the county ordinance that created Buyer Beware, however, businesses must display them.

“We try to work with people, but there’s not a lot of wiggle room,” she says.

The county’s overcharge notices, required by law to hang within five feet of a retailer’s front door for 60 days after a conviction, were conceived in an effort to ensure accurate pricing after Supervisor Gloria Molina complained about overcharges at a Macy’s and a Kmart during the 2001 holiday shopping season. At the time, only one full-time inspector had been assigned to monitor pricing accuracy at the more than 10,000 merchants who do business here.

A subsequent investigation found overcharges at two-thirds of 108 retailers sampled around the county, and that spawned the Buyer Beware program, which requires stores to register price scanners and pay a fee that, in turn, underwrites the scanner inspection program. The blue-and-white overcharge notices—variously regarded as something between a restaurant grade and a scarlet letter—were added at the end of a yearlong grace period after the inspections were launched in 2002.

ACWM spokesman Ken Pellman compares the signs to speeding tickets. “The enforcement prevents larger problems and keeps things orderly,” he says. Like speeding tickets, he adds, they have also worked well as a deterrent. Last year, only about 17 percent of the 8,459 retailers inspected were caught overcharging.

Overcharging, he says, “is still unfortunately a common problem, but it’s less common than it used to be.”

Posted 5/9/13