Safeway ordered to pay almost $42 million for website sales

The Safeway store at College and Claremont avenues is seen in Oakland, Calif. on Wednesday, Oct. 14, 2015. The Safeway store at College and Claremont avenues is seen in Oakland, Calif. on Wednesday, Oct. 14, 2015. Photo: Paul Chinn, The Chronicle Buy photo Photo: Paul Chinn, The Chronicle Image 1 of / 4 Caption Close Safeway ordered to pay almost $42 million for website sales 1 / 4 Back to Gallery

A federal judge in San Francisco has ordered Safeway to pay almost $42 million to customers nationwide who bought groceries from the market chain’s website and were unaware that they were being charged 10 percent above store prices.

U.S. District Judge Jon Tigar granted $30.9 million in damages and $10.9 million in interest Monday to online shoppers who had registered with Safeway.com between 2006, when the website opened, and November 2011, when the company reworded its policy to declare that online prices “may differ from your local store.”

Safeway did not send notices of the change to pre-November 2011 customers, who can seek refunds of at least some of the surcharges they paid after that date. Tigar has not said how many customers will be eligible for refunds or how they can apply, details that may be worked out in future hearings.

Safeway said Friday it will ask the Ninth U.S. Circuit Court of Appeals in San Francisco to overturn Tigar’s earlier ruling that it had misled customers about their prices.

Safeway, headquartered in Pleasanton, imposed the 10 percent markup on website purchases in April 2010 without announcing the change to its customers. The company contended it had adequately notified customers since 2006 that they might pay higher prices online, but Tigar disagreed.

The website told customers that they would be charged prices that were “quoted for products ... at the time your order is processed at checkout.” The notice also said website prices “are likely to vary either above or below the prices in the store on the date your order is filled and delivered.”

Although Safeway argued that “prices in the store” referred to the online store, Tigar said customers were much more likely to interpret the statements as referring to prices charged in brick-and-mortar supermarkets.

Apart from delivery fees mentioned by the website, Safeway was promising online customers that “the prices charged for Safeway.com products will be those charged in the physical store where the groceries are delivered,” Tigar had said in an earlier ruling. He said Safeway broke that promise by raising online prices in 2010 and failing to notify customers.