Rite Aid settles lawsuit with Riverside and San Diego counties, California, that alleged false advertising, unlawful business practices; company will pay US$800,000, make changes in its stores, procedures to comply with order

Cindy Allen

RIVERSIDE, California , October 11, 2012 (press release) – Today, Oct. 10, 2012, Riverside County District Attorney Paul Zellerbach announced the settlement of a civil law enforcement action against Rite Aid Corporation and Thrifty PayLess, Inc., doing business as Rite Aid, alleging the company violated state false advertising and unlawful business practices laws.

The civil lawsuit was filed jointly in San Diego County by the District Attorneys in Riverside, Santa Clara and Ventura counties along with the San Diego City Attorney’s Office.

Today, San Diego County Superior Court Judge Ronald Prager ordered that Rite Aid Corporation pay $800,000 in civil penalties, investigative costs and restitution to settle this action. The corporation also agreed to make changes in its stores and institute procedures to comply with the order.

The civil complaint alleges that over an 18-month period Rite Aid conveyed to consumers in its advertisements that they would pay lower prices when purchasing items using a Rite Aid Wellness+ Card. However, consumers could not purchase the item at the advertised price, but instead were given a coupon for money off a future purchase. Rite Aid agreed to stop using the “It’s like getting it for …” and “It’s like paying …” advertising in California. In addition, Rite Aid is now required to clearly disclose limitations or restrictions, including quantity and expiration dates and timing on the use of the “+UP Rewards” or any similar discount program.

The lawsuit also alleges that, for about a four-year period, Rite Aid stores refused to redeem gift cards that had a balance of less than $10 for cash, as required by state law. Rite Aid has now agreed to institute a new program by which customers with gift cards containing a balance of less than $10 will be asked if they would like to redeem the card for cash.

There are 39 Rite Aid stores in Riverside County. As part of the settlement, Rite Aid agreed to pay Riverside County $175,000 in penalties. The corporation also must pay $75,000 to the California Department of Food and Agriculture, Division of Measurement Standards, for future use in that agency’s price verification program.

The settlement was handled in Riverside County by Deputy District Attorney Elise Farrell of the DA’s Consumer Fraud Unit.

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