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Sears, Kmart Pay More Than $1 Million
to Settle Consumer Case

July 19, 2010
Contacts: Joe Scott, Director of Communications
Sandi Gibbons, Public Information Officer
Jane Robison, News Secretary
Shiara Dávila, Assistant PIO
(213) 974-3525

LOS ANGELES – Sears, Roebuck and Company and Kmart today agreed to pay $1.1 million to settle a civil lawsuit alleging the retailers engaged in dishonest business practices that caused consumers to overpay for items advertised for less and subjected consumers to unlawful prices for certain beverage containers.

“These retailers are established, trusted household names. When consumers set foot in their stores, they have a reasonable expectation to receive fair and lawful prices,” District Attorney Steve Cooley said.

“A company that engages in deceptive advertising to bait consumers or deliberately overcharges customers will be sued to assure compliance with the law,” Cooley added.

Deputy District Attorney Stuart Lytton of the Consumer Protection Division said both companies agreed to the settlement without admitting liability. The Los Angeles County District Attorney’s Office with the District Attorneys of five other California counties – Marin, Alameda, Sonoma, Santa Clara and Santa Cruz counties – filed the civil complaint in Marin County Superior Court.

Sears and Kmart, whose principal companies are based in Hoffman Estates, Ill., agreed to pay civil penalties and legal costs incurred by prosecutors and investigators. Under the terms of the stipulated judgment, the companies further agreed to desist from making false or misleading statements to the public with respect to the price of items advertised for sale.

The retailers must additionally maintain compliance programs for a period of three years to enhance pricing accuracy and correct pricing errors. Sears and Kmart will be required to conduct in-store audits no less than once a week and will be subject to independent, third-party audits at least once a year.

The civil action stems from an investigation into pricing and scanning practices conducted by various California weights and measures agencies, including the Los Angeles County Weights and Measures Department.

That investigation revealed that Sears and Kmart charged more than their advertised prices. The investigation also revealed that Kmart violated the California Beverage Container Recycling and Litter Reduction Act by charging more for California Redemption Value (CRV) beverage containers than allowed by law. Kmart also charged consumers the CRV fee for containers not covered under state law.

The stipulated judgment was signed today by Marin Superior Court Judge Verna Adams.



Editors: For additional information, contact Deputy District Attorney Stuart Lytton of the Los Angeles D.A.’s Consumer Protection Division, at 213-580-3319.

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