How Menards’ 11 Percent Rebate Ended in a $4.25 Million Payout
Ten states, led in part by Wisconsin, said the popular promotion blurred the line between instant discounts and mail-in rebates for shoppers.
An exterior view of a Menards store. Mike Kalasnik (CC BY-SA 2.0)
Menards will pay $750,000 to the State of Wisconsin as part of a multistate consumer protection settlement, Attorney General Josh Kaul announced Wednesday.
The Wisconsin-based home improvement retail chain will pay out $4.25 million total to ten states in response to complaints about its well-known rebate program.
That program, in which customers could mail back a rebate form in exchange for 11 percent back, amounted to false advertising about an 11 percent discount, Kaul said in a virtual press conference.
“One of the things that we focused on was whether there was a representation that those kinds of discounts were point of sale discounts, as opposed to rebates,” Kaul said.
The settlement came out of a complaint tied to concerns over unfair business practices and alleged price gouging during the early days of the COVID-19 pandemic, Kaul said.
As part of the agreement, the company will look into offering an online option for its rebate process, Kaul said. Currently, customers must physically mail in rebate forms along with their receipts.
It will also offer customers a year to redeem those receipts and create an online process for tracking the rebate claim.
Kaul, who is running for reelection as a Democrat in what is expected to be a competitive race, said the settlement reflects his agency’s commitment to protecting consumers, “particularly at a time when so many Wisconsinites are feeling the burdens of high costs.”
“Ensuring that prices are fair and transparent is critical. Wisconsinites have busy lives. They wanted to be treated fairly,” he said.
Settlements with the Department of Justice often have to be approved by the GOP-held Joint Finance Committee, but Kaul said a recent Wisconsin Supreme Court ruling likely means this settlement can be paid out directly without legislative weigh-in.
“There’s an ongoing dispute as to how these funds in recoveries like this ought to be used,” he said, “but my view is that funds that are being recovered in cases like this should go to support the work that DOJ does to protect Wisconsinites, both to protect public safety and to protect consumers.”
He did not immediately answer a question about how the funds would be used by the state.
Headquartered in Eau Claire, Menards is known for a catchy jingle inviting shoppers across the Midwest and Great Plains to “save big money at Menards.” Its CEO, John Menard, is among Wisconsin’s wealthiest residents, and has donated millions to Republican candidates and PACs.
The other states involved in the lawsuit are Arizona, Kansas, Illinois, Iowa, Michigan, Minnesota, Nebraska, Ohio and South Dakota.
Wisconsin DOJ settles consumer complaint with Menards was originally published by Wisconsin Public Radio.
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Rebates, in general, are a stores way of gambling (and a gimmick) with the consumer…the gambling portion being the part where the consumer forgets to mail in the rebate, and they don’t pay out anything. But then, I must be smarter than those filing the rebates, on time, and understanding that it is only worthwhile if you come back to shop at Menard’s on a future date. Kohls does that with Kohls Cash, so will they get sued now too? It is spelled out. But, unlike Kohls, the rebate check to use in the future lasts forever, not where Kohls makes you use things like points and cash back dollars in a week or two, and often, when nothing will be on sale.
As for the price gouging portion of the lawsuit…that seems to be a different, and a separate, offense. But, like everything else in the legal system, it should not have taken 5 years to settle that wrong. But the attorneys per hour fees thank you.