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Lawsuits & Litigation

Target Pays $5m to Settle Phone App Overcharging Claims

— April 29, 2022

A San Diego prosecutor said that Target’s mobile phone application raised prices on “sale” items once customers entered physical, brick-and-mortar stores.

Target has agreed to pay $5 million to settle a lawsuit alleging that the retail chain overcharged consumers by advertising low prices on its mobile phone applications—and then changing them once customers walked into the store.

According to The Minneapolis Star-Tribune, the lawsuit was filed by the San Diego District Attorney’s Office in February.

The lawsuit, adds the Star-Tribune, was formally settled in March.

However, this was not the first time that the San Diego D.A. filed a claim against Target. In 2018, the store paid $7.4 million to settle allegations that it violated California laws on the handling and disposal of hazardous waste.

“With this latest lawsuit, we’re continuing to protect consumers and their hard-earned money, as well as ensuring that Target is held responsible when it violates the law,” San Diego County District Attorney Summer Stephan said in media release.

A gavel. Image via Wikimedia Commons via Flickr/user: Brian Turner. (CCA-BY-2.0).

The Star-Tribune notes that Stephan’s lawsuit criticized Target’s use of geofencing, a form of GPS-based technology that lets businesses know when mobile application users have entered or exited a designated area.

Steve Spinella, San Diego’s deputy district attorney, told KARE-11 that the D.A.’s office opened its investigation after seeing a KARE-11 news story on the topic of Target application pricing.

“We learned of your news story that showed changes on the app depending on the location,” Spinella said at the time. “We conducted our own independent investigation to see if this was also occurring in California.”

In their lawsuit, San Diego prosecutors said that Target did not tell consumers that some of its low-price offers were only available online, and that the mobile application would change prices if and when they entered physical Target stores.

Target will now pay $5 million to settle the claim.

The company also said that it will no longer use geofencing technologies to raise the price of items when consumers visit brick-and-mortar retail locations.

Target must also clearly define its pricing, letting consumers know where special prices are available, and if there are any differences between in-person and online purchases.

In a statement, the San Diego D.A.’s office said that Target had cooperated with investigators and is taking steps to improve its pricing accuracy.

Target, for its part, said that is does not currently use geofencing to alter prices and offers.

“Target is committed to providing value to our guests, and that includes accurate pricing in our stores and online,” Target said in a statement. “We’ve taken steps to improve our processes because the majority of these issues in California occurred when promotional signs were not removed immediately after a promotion ended. If guests have questions, they can bring their receipt to the guest service desk to discuss a price adjustment.”


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