Illinois Attorney General Kwame Raoul announced a settlement this week with Menards to resolve a suit Raoul and nine other attorneys general filed claiming the home improvement chain violated consumer fraud laws by deceptively marketing its 11% rebate program as a way for customers to save money when they were really receiving future store credit.
The settlement will require Menards to “clearly and conspicuously” explain the store’s rebate policy as one that offers no discount at time of purchase, but rather store credit for purchasing goods. The attorneys general also accused Menards of price gouging items in early 2020 during the onset of COVID, though the settlement “is neither an admission nor denial of liability by Menards.”
“Raoul and the attorneys general allege that Menards’ advertised prices reflected an 11% discount, which falsely implied that customers could realize savings at the time of purchase. According to the attorneys general, Menards failed to appropriately disclose the details of the rebate program, which were detailed in small print,” states a press release from Raoul’s office. “The attorneys general also allege that Menards engaged in price gouging during the COVID-19 pandemic by raising prices on a few important items, such as garbage bags, isopropyl alcohol, dish soap and neoprene gloves in early 2020.”
Illinois will receive about $950,000 of the total $4.25 million settlement. In response to an inquiry from Illinois Times about the intended use of the funds, a spokesperson from the AG’s office said, “It will go to the state to be used for future consumer protection efforts.”
Menards is also required to look into building an online infrastructure to accept “merchandise credit” and is prohibited from price gouging items “during a period of abnormal economic disruption.”