It's a drop in the profit bucket for the San Diego-based company, but Petco has agreed to pay more than $900,000 to settle a pair of lawsuits that accused the pet-retailer giant of overcharging customers and mistreating animals.
The settlement, announced late last week with a perceptible sigh from both sides, ended a protracted, two-year negotiating period following three years of citations and warnings over numerous violations at approximately 60 of the estimated 140 Petco stores throughout California. District attorneys in four counties statewide had joined forces to prosecute the violations, with San Diego's office taking the lead.
A Petco executive said the company had admitted no wrongdoing in settling the lawsuits-which also included a case filed by San Francisco's city attorney that unsuccessfully sought an outright ban on pet sales at the two Petco stores there-and insisted that the company has already instituted most of the measures dictated in the settlement.
"We're ready to move along, and we've been moving along," said Don Cowan, Petco's director of communications. "We're comfortable where we are, and even more comfortable in where we're going."
The pet-store chain reportedly still faces additional legal tussles in Utah and Las Vegas and a frontal assault in the form of a boycott called by People for the Ethical Treatment of Animals, or PETA, as the animal-rights group is commonly called.
In a statement released after the settlement announcement, PETA hailed the actions as "landmark" but said it "continues to document ongoing neglect and abuse at Petco stores nationwide. Having received 204 complaints regarding 179 different Petco stores in just the past three months, PETA has called for a national boycott of Petco until the company ends its sale of live animals."
PETA maintains a website-Petcocruelty.com-specifically dedicated to its pursuit of that end. Celebrities like Kim Basinger adorn the main page, urging Petco employees to rat out animal abusers among their colleagues. It is also a clearinghouse for what the group swears are authentic complaint letters from current or former employees. The stories are bone-chilling.
Mice smacked on the floor before being fed to snakes. A groomer abusing dogs. Sick animals kept in filthy, stacked cages.
Petco's Cowan was somewhat dismissive of such allegations, although he acknowledged that there might have been "something to" an "isolated number" of complaints. "But as far as I know," he cautioned, "there has never been one of them that has been completely accurate.... In some cases, we do find the details to warrant investigation and, in some cases, action.
"Does that mean we're perfect? Oh, heavens no. We wouldn't have been in this situation."
He also dismissed any effect the PETA boycott had on reaching the settlements. "No factor. No factor," Cowan said.
In addition to paying civil penalties of $550,000 and nearly $102,000 in investigation costs, Petco must spend more than $202,000 to buy improved pricing-accuracy equipment for stores in each of the 27 California counties in which it currently does business. (In the San Francisco case, Petco agreed to pay a $50,000 fine and provide formal animal-care training to its employees.)
Kurt Floren, deputy director of the county's Agriculture, Weights and Measures Department, said his agency found numerous problems with Petco's price-checking procedures. He said of the 116 inspections made by his agency on various Petco stores, 89 of those spot-checks revealed "one or more overcharges."
In San Diego, those overcharges ranged from a low of three cents to a high of $8. Customers in Los Angeles County, meanwhile, found overcharges as high as $20.
Floren said overcharges continued even after his agency had fined the company a total of $2,600 over four separate occasions that preceded the case settled last week. "They paid those fines," he said, "but after those actions we continued to see continuous overcharge violations at a rate well above the typical errors that we see in the marketplace."
Many of the problems involved sales items, where an advertised discount didn't register. Part of the settlement involved charges of misleading advertising and unfair competition, and the reason for that, Floren said, is easy.
"Maybe the overcharge isn't noticed because it's part of 10 or 12 items that the person bought," he said. "That has not only defrauded that consumer, but it also took a potential customer away from a competitor."
Cowan said Petco welcomes "improved pricing integrity." On the matter of animal neglect, he remained undaunted. "I think we're doing more to care for our animals than some people do to care for their kids," he said. "No, I'm serious. If you're a parent, do you look at your kids every hour to see how they're doing? That's what we do."San Diego Deputy District Attorney Tricia Pummill said that better be the case. "They weren't being attentive," she said, "and we tried to address that with our judgment."