Walmart+ Subscription Class Action: Illusory Benefits, Hard to Cancel

Businesses have discovered that the subscription model is profitable, locking customers in to regular payments. Walmart, Inc. now offers a Walmart+ or “Walmart Plus” subscription, but the complaint alleges that the automatically-renewing subscription is unfair to consumers in a number of ways, including misleading representations of benefits and deceptive practices.

Two classes have been proposed for this action:

• The Michigan Class is all persons in Michigan who subscribed to the Walmart+ subscription during the applicable statutes of limitations.
• The Consumer Fraud Multi-State Class is all persons in Iowa, Kansas, Montana, Alaska, Arkansas, Wyoming, West Virginia, Kentucky, South Carolina, South Dakota, and Utah who subscribed to the Walmart+ subscription during the applicable statutes of limitations.

Subscriptions involve “negative option marketing,” the complaint alleges, meaning that they do not expire; they continue until consumers take action to cancel.

Sometimes a subscription is offered via a free trial period, after which consumer begins to be charged for a subscription. The complaint claims, “A 2018 report from the Better Business Bureau (‘BBB’) shows losses in the ‘free trial offer’ cases pursued by the [Federal Trade Commission] over the last ten years exceed $1.3 billion.”

The complaint takes issue with the Walmart+ subscription for two reasons. First, it says that the presentation of benefits is misleading and deceptive, telling consumers they can “save $1,300+ a year*” on deliveries, fuel discounts, and other things.

However, the complaint alleges that the fine print discloses that these savings are calculated based on “2 deliveries/wk at non-member $7.95 fee + 2 Walmart.com orders under $35/wk at non-member $6.99 shipping fee.” Most customers, the complaint alleges, do not place two delivery orders per week or two orders per week from Walmart.com of less than $35 each.

Also, the representations of “free delivery from your store” or “$0 delivery fees” are restricted to orders of at least $35, with additional amounts charged for express deliveries. Another representation of “Free shipping, no order minimum,” the complaint alleges, has fine print saying that this “[e]xcludes most Marketplace items.”

The complaint alleges that consumers can be led to sign up for a trial without finding out about these limitations.

Another problem with the Walmart+ subscription, the complaint alleges, is that it is difficult for consumers to cancel it. For example, the complaint alleges that the Terms of Use tells customers to cancel by “call[ing] Walmart Customer Care [], or through your Walmart Account.” But those who call Walmart, the complaint claims, wait an average of 37 minutes to speak to a representative; and those who choose the other option, it says, “are overwhelmed by the numerous selections and settings, and not conspicuously presented with how to cancel.”

Even when they do manage to cancel, the complaint alleges that Walmart sometimes continues to charge them. Finally, if they remove or lose the specific payment method they used to enroll in the program, Walmart will charge the payment to any other payment method it is aware of.

Article Type: Lawsuit
Topic: Consumer
Tags: Automatic Subscription Renewal or Continuous Service Agreement, Deceptive Advertising, Negligent Misrepresentation, Unfair Subscription Practices, Unjust Enrichment