Menards to Pay $4.25M in Multistate Settlement Over Deceptive 11% Rebate Ads and COVID Price Gouging

(KNSI) – Minnesota Attorney General Keith Ellison announced Thursday that home improvement retailer Menards has agreed to pay $4.25 million to settle allegations of deceptive advertising and COVID-19 price gouging across multiple states.

Minnesota will receive approximately $632,000 of the $4.25 million settlement.

The settlement resolves claims that Menards misled customers about its widely advertised “11% Rebate Program” and illegally raised prices on essential items during the pandemic.

According to the settlement, Menards advertised “11% OFF” and “11% OFF EVERYTHING” in ways that suggested customers would receive an immediate discount at checkout. Instead, the company only offered merchandise credit that could be used on future purchases.”An ad that says ‘11% OFF EVERYTHING’ clearly implies that you can buy goods at an 11% discount, not that you can participate in a limited rebate program or get in-store credit for future purchases,” Ellison said in a statement.

Investigators found that Menards displayed advertised prices that
reflected an 11% reduction, creating the false impression of point-of-sale savings.

The company also buried important program limitations in small print and failed to clearly disclose that Rebates International, which it claimed was a separate entity handling rebates, was actually Menards itself.

The settlement also addresses allegations that Menards raised prices on essential items during the COVID-19 pandemic, including rubbing alcohol, garbage bags, dish soap, and neoprene gloves.

Under the agreement filed in Ramsey County District Court, Menards must implement several significant reforms to its advertising and sales practices. The company is prohibited from advertising store credit programs as point-of-purchase discounts and must clearly disclose all rebate program limitations and terms. Menards must explore options for allowing customers to submit rebates and redeem them online in a secure manner.

The retailer must also disclose that it operates Rebates International and give customers at least one year to submit rebate claims. The company’s online rebate tracker must be updated within 48 hours of a claim being entered into the system and provide detailed status information, including how returns affect rebates. Additionally, Menards is prohibited from engaging in price gouging during periods of economic disruption.

The agreement was negotiated by Minnesota, Illinois, Iowa, and Wisconsin, with Arizona, Kansas, Michigan, Nebraska, Ohio, and South Dakota joining the settlement.

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