Menards, a home improvement retail chain based in Eau Claire, Wisconsin, will pay a total of $4.25 million in fines to ten states for deceptive advertising practices related to its 11% rebate program. The settlement, announced by Wisconsin Attorney General Josh Kaul on December 17, 2023, includes a penalty of $750,000 specifically allocated for Wisconsin.
The investigation revealed that Menards misled customers regarding how its 11% rebate was applied to purchases. Prices on the company’s website were often presented as the net cost after rebate, rather than the actual price before the rebate was applied, which became evident at checkout. Furthermore, it was discovered that certain items, such as event tickets, gift cards, propane deliveries, and rentals, were not eligible for the rebate, despite claims that everything in the store qualified.
Price-Gouging Allegations During Pandemic
The inquiry also found instances of price-gouging during the COVID-19 pandemic, with two Menards locations in Onalaska and Johnson Creek inflating prices on 4-gallon bottles of water, despite an emergency declaration that prohibited such practices. Additionally, customers were directed to Rebates International to resolve rebate claims; however, this entity is a subsidiary of Menards, creating confusion for consumers.
Under the terms of the settlement, Menards is required to cease advertising the 11% rebate as a point-of-purchase discount. The company must also ensure consumers are informed of the limitations associated with its rebate program. Notably, Menards plans to explore options to streamline the rebate redemption process online, moving away from the current requirement for customers to submit paper forms and receipts via mail. Customers will now have one year to submit their rebate claims.
Consumer Protection and Future Steps
Attorney General Kaul emphasized the importance of clear communication in retail practices, stating, “Whether you’re a big business or a small shop, ensuring that you are providing accurate representations to your customers is critical. People shouldn’t have to go through an adventure to figure out how much they have to pay for items that they’re purchasing. It should be straightforward.”
Prior to the settlement, discrepancies were present on the Menards website, where the price displayed on the search results page differed from the full price shown on individual product pages. Following the investigation, these inconsistencies have reportedly been addressed, with the rebate information now removed from the website.
The settlement was coordinated by a coalition of Midwestern states, including Wisconsin, Minnesota, Illinois, and Iowa, along with participation from attorneys general in Michigan, Nebraska, Kansas, Arizona, Ohio, and South Dakota. The Wisconsin Department of Trade, Consumer Protection and Agriculture also played a role in this resolution. Kaul expressed a desire for the $750,000 in fines to support further consumer protection initiatives.
Founded in 1962, Menards is now the third-largest home improvement retailer in the United States, operating over 300 stores across 15 states.
