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October 5, 2004
 Adam Radinsky, Deputy City Attorney, (310) 458-8327

Governor Schwarzenegger last week signed into law AB 1721, a bill that will close an important loophole in state law about prices that stores may charge. Under the new law, when more than one price for an item is posted, stores must charge the lowest posted price. Also, stores can't avoid the rule by relying on "expiration" or "effective" dates for sale items.

The law already made it a crime for stores to charge more than the posted price. However, many stores have been leaving up sale price tags (often in the form of "Club" specials) on items after the sale for the item had expired. So consumers were being charged full price even though a bold-type sale sign was still up. This was especially misleading since shoppers often don't read the fine print and since at any given time, most supermarkets have literally thousands of different items on sale with all different expiration dates.

The bill became necessary after judges ruled in favor of Vons Companies in several Southland trials. Vons had argued that it could charge regular price for items even though the sale prices were still displayed, since the sale tag included an expiration date. In recent months, more and more stores had begun relying on this tactic to avoid honoring sale prices.

The Santa Monica City Attorney's Consumer Protection Unit worked closely on the drafting and development of the bill, which was authored by Assemblyman Paul Koretz of West Hollywood.

"This is a deceptively important change in the law," said Deputy City Attorney Adam Radinsky. "Most consumers don't even know when they're overcharged at the supermarket since there are usually so many items in their cart and it's impossible to keep track of all the different sale prices. The last thing we need is stores charging regular price when the sale signs are still up."

The Santa Monica City Attorney's Office has prosecuted dozens of large chain stores in recent years for charging more than the posted price. Violations of the law are misdemeanors if the overcharge is more than one dollar. Stores are subject to a maximum fines and penalties of more than $3,000.00 for each violation.

The new law goes into effect on January 1, 2005.

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