ALBANY — Walgreens has settled a complaint that it used misleading advertising and overcharged consumers.

New York State Attorney General Eric Schneiderman announced the settlement Thursday with the national drugstore chain and its subsidiary Duane Reade.

Walgreens will pay $500,000 in penalties, fees and costs and agreed to reform several of its current advertising and business practices in New York.

The chain operates 251 Walgreens, including locations in Plattsburgh and Malone, and 214 Duane Reade stores across the state.

An undercover investigation by Schneiderman's office revealed several deceptive practices, according to a news release from the Attorney General's Office. 

That includes prices listed in print ads or on the shelf that didn't match what was charged at checkout; advertising products as a “Smart Buy” or “Great Buy” when the advertised price is the same as the regular Walgreens price; advertising products as a “Last Chance” or “Clearance” item when it may remain available for up to 10 months or more; and implying products were eligible for an immediate cash discount when that was the case only for a later purchase.

“Businesses are required to ensure that their advertisements are truthful and not misleading," Schneiderman said in the press release.

"When consumers purchase products at retail stores in New York, they should be able to rely on the prices displayed in advertisements and on shelf tags and not have to worry about being overcharged when they get to the register.” 

The investigation also found Walgreens failed to provide consumers with clear and consistent information concerning its Balance Rewards Points program, the news release said.

As part of the settlement, Walgreens agreed to remove expired shelf tags within 36 hours; restrict the use of “Smart Buy” or “Great Buy” shelf tags; no longer promote items as a “Last Chance” or a “Clearance” item if the product will remain available for sale for an extended period of time; and conduct internal and external price check audits in its stores.

The company agreed that each store that fails two consecutive external audits will pay an additional $2,500 penalty.

Walgreens agreed to update PIN pads in its stores to display consumers’ Balance Rewards Points and, on every fifth purchase, ask consumers at the checkout if they want to redeem their points.

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