Drug store chain settles Calif. overcharging suit

SAN JOSE, Calif. (AP) -- Drug store chain Walgreens has agreed to pay a little more than $1.4 million in civil penalties and to establish a price guarantee program for California customers to settle a lawsuit brought by prosecutors in four Bay Area counties.

Santa Clara Deputy District Attorney Martha Donohoe said Wednesday that the settlement resolves "multiple" discrepancies inspectors found between the prices Walgreens advertised on shelves and what people were charged.

As part of the agreement, Walgreens will establish a "Scanner Price Guarantee" program at its 625 California stores.

Donohoe says customers who are overcharged at checkout will be entitled to receive an item for free if it cost under $5, and either a $5 discount or a $5 credit if it costs more than that.

Walgreens spokesman James Graham says the company cooperated with the inquiry, and noted the company did not admit to any wrongdoing.