PENNEY TO PAY $100,000 TO SETTLE MICHIGAN SUIT

Byline: Vicki M. Young

NEW YORK — J.C. Penney Co. has agreed to pay a $100,000 fine to settle a lawsuit filed by the Michigan Attorney General’s Office over price-scanning errors at its stores in that state during the 1999 holiday season.
As part of the settlement, Penney’s will designate an on-site “pricing associate” to monitor and immediately correct errors in sale signs or computer pricing. The associates are also required to report any errors to both store management and to corporate headquarters in Plano, Texas.
The retailer also agreed to pay $9,297 for legal costs incurred by the attorney general. The settlement, as part of a consent decree, was filed in a circuit court in Lansing, Attorney General Jennifer M. Granholm said Tuesday.
Under the terms of the decree, Granholm’s office may conduct periodic inspections to ensure that the retailer is complying with the settlement. If Penney’s maintains a 96 percent scanner accuracy rate, $50,000 of the civil fine will be waived.
Granholm said in a statement, “J.C. Penney is to be commended for agreeing to make accurate pricing a priority. No one likes a surprise at the checkout counter. This agreement will ensure that Penney’s customers will see far, far fewer of them.”
Granholm added that the pricing procedures the retailer agreed to “should make Penney’s an industry leader in protecting consumers from pricing errors. But we’ll be watching.”
Granholm’s office conducts annual holiday accuracy surveys. In 1999, her office found more than 33 percent of the items purchased at four Penney stores in Michigan rang up incorrectly at the register. In 1997, her office said, the error rate was 23.7 percent. It inched up to 27.6 percent in 1998.

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