MI Announces Settlement With Menards Over Rebates, Price Gouging

Michigan will receive part of a multi-million dollar settlement against Menards that resolves allegations that the retailer deceptively advertised rebates and engaged in price gouging during the COVID-19 pandemic.

The agreement was negotiated by Michigan and nine other states, including Minnesota, Illinois, Iowa, Wisconsin, Arizona, Kansas, Nebraska, Ohio and South Dakota.

Under the settlement, Menards will pay $4.25 million to the coalition of states, including $637,641.06 to Michigan.

The lawsuit said Menards routinely advertised its promotion using phrases such as "11% OFF" or "11% OFF EVERYTHING," which investigators argued falsely implied an immediate discount at the register. In reality, customers paid full price and later received a mail-in merchandise credit that could only be redeemed at Menards stores.

State investigators also found that Menards’ advertised prices often reflected the rebate amount rather than the price actually paid at checkout, and that key limitations of the rebate program were disclosed only in small print or separate materials.

In addition, the states said Menards misrepresented "Rebates International" as a separate entity responsible for handling rebate issues when it is actually part of Menards itself.

For instance, Michigan Attorney General Dana Nessel said her office began receiving complaints in March 2020 that bleach, face masks and other products at higher costs than normal as the COVID-19 pandemic spread.

"Advertisements should inform customers, not deceive them," Nessel said in a news release. "My office will continue working with attorneys general across the country to protect consumers from misleading marketing practices."

As part of the agreement, Menards is prohibited from advertising any store-credit rebate as a point-of-purchase discount. The company must clearly disclose all material limitations of its rebate program, including that rebates are not immediate discounts and are redeemable only as in-store credit.

Menards is also required to disclose that Rebates International is not a separate company, give customers at least one year to submit rebate claims, and provide faster and more transparent updates through its online rebate tracking system. The settlement further bars Menards from engaging in price gouging during future periods of abnormal economic disruption.

Menards did not admit wrongdoing as part of the settlement.

Patch Editor William Bornhoft contributed to this report