A recent Cracker Barrel experience is being used as a teachable moment, which will include legal analysis to help determine if the restaurant's actions were illegal. This site provides free self-help legal information.
I visited Cracker Barrel located at 10915 New Halls Ferry Road, Ferguson, MO 63136, Monday to help celebrate my son's birthday. I ordered meatloaf listed in the "Weekday Lunch Features" section for $5.99. Since my 92-year-old father was unable to attend, I placed a to-go order of the meatloaf for him.
When I received my bill, the meatloaf orders were listed for $6.99 each instead of the $5.99 menu price. I pointed out the mistake to the server who mentioned that the price had changed but that it wasn't reflected on the menu. The server had mentioned earlier that it was his first time working as a server. We left a tip on the table and I decided to get the bill corrected when I checked out.
When I presented the bill to the cashier, I explained that my bill was incorrect. A copy of Cracker Barrel's menu was sitting on a podium in the checkout area and I was able to show her the $5.99 price on the menu. The cashier also explained that some prices had gone up, but that they were not reflected on the menu and she called for the manager.
After waiting for the manager for about 10 or 15 minutes, he also acknowledged that some of the prices on the menu were incorrect and that they were waiting for the company to send updated copies. I asked, how do we fix this? The manager replied that $6.99 was the price. I pointed to the menu setting on the podium and stated this is the price, the $5.99 listed on the menu. The manager stated he had no way to honor the $5.99 menu price.
I mentioned under Missouri's truth in advertising statute, state law requires them to honor the menu price. I further explained that it was a simple matter to place a sticker with the new price over the old price. The manager held firm on the $6.99 price. Rather than escalate the issue, I explained that I no longer wanted the to-go meal, and only paid the $6.99 price plus tax for the meal I consumed. I told the manager to tell Cracker Barrel's corporate office I would be filing a complaint with the Missouri Attorney General's office.
I don't regularly patronize Cracker Barrel and the location was chosen by someone else. I've visited Cracker Barrel maybe four or five times, usually to meet with others celebrating a special occasion. Before ever visiting a Cracker Barrel restaurant, I saw news reports about racial bias. That information helped to form my impression of Cracker Barrel. I prefer to spend my money with businesses that appreciate my patronage. In 2004 the U.S. Department of Justice settled a complaint that alleged Cracker Barrel:
- allowed white servers to refuse to wait on African-American customers;
- segregated customer seating by race;
- seated white customers before African-American customers who arrived earlier;
- provided inferior service to African-American customers after they were seated; and
- treated African-Americans who complained about the quality of Cracker Barrel's food or service less favorably than white customers who lodged similar complaints.
You can read the consent decree for yourself. Later that same year, Cracker Barrel customers filed a $100 million federal discrimination lawsuit. I have no reason to believe this incident being discussed here was racially motivated; in fact, my server, the cashier, and the manager were all African-American.
When an offer is made and accepted a contract is created. Once I placed my order, a contract existed between Cracker Barrel and myself. Here's where it can get a little tricky; the menu is not an offer. Menus are considered invitations to make an offer. When I placed my order, I was making an offer to purchase the menu item (accepting their invitation). By taking the order the server is accepting the offer, thereby forming the contract. The consideration is made by my acceptance to pay for the $5.99 menu price in exchange for the food or beverage.
The essential elements of a contract in Missouri are: “(1) competency of the parties to contract; (2) subject matter; (3) legal consideration; (4) mutuality of agreement; and (5) mutuality of obligation.”
Since Cracker Barrel failed to honor the contracted price, they breached the contract and exposed themselves to the possibility for legal action simply because they wouldn't honor their menu price.
Truth in Advertising
The Missouri Merchandising Practices Act (MMPA), Chapter 407 of Missouri Revised Statutes, is the state’s primary truth-in-advertising law.
RSMO 407.010, defines the term advertisement fairly broadly which would include restaurant menus. An advertisement or solicitation that creates a false impression in the mind of a reasonable consumer and that was made with the intent of influencing a purchasing decision is unlawful false advertising in Missouri. The regulations specifically provide that reliance is not an element of deception or misrepresentation. 15 CSR §§ 60-9.020, -9.070.
RSMO 407.020 defines misrepresentation, suppression, or omission of any material fact among other things as an unlawful practice. Under the MMPA, “omission of a material fact is any failure by a person to disclose material facts known to him/her, or upon reasonable inquiry would be known to him/her.” The sever, cashier, and manager all knew about the price change but failed to tell the customer.
RSMO 407.025 provides for damages and allows punitive damages and attorney fees.
To succeed in a false advertising claim under the MMPA, a plaintiff must prove the following four things:
- There was a purchase, advertisement, or active solicitation of goods or services
- The advertisement in question was primarily targeted for consumer purposes, not for business-to-business purposes
- The advertisement or solicitation was, in some manner, unlawfully deceptive
- The plaintiff suffered actual financial harm as a result of the false advertising
Truth in Advertising is not the same as Truth-in-Menu also known as “Accuracy-in-Menus” and “Truth-in-Dining” terms used to describe regulations governing restaurant menus. Many locations require that menu descriptions be honest and selling prices and service charges be accurate. Examples of information that should be carefully described include preparation style, ingredients, item size, and health claims.
It's unwise for a business to expect customers to pay for their mistakes. Until Cracker Barrel refused to correct its pricing error, I had an enjoyable experience. The meatloaf was decent and everyone else seemed to enjoy their meal. I relied on the accuracy of the menu. I don't know if I would have placed the same order if the $6.99 price was listed. I was actually considering a couple of more expensive options when I noticed the $5.99 menu. I might have ordered the chicken for $9.99 instead. Regardless, I would have still placed an order for my father. It wasn't that I couldn't afford the extra dollar, it was the total lack of regard and respect shown when they refused to honor their menu price!
Cracker Barrel ruined what would have been a positive experience and turned it into a negative one. If not but for the pricing error, I would have left very satisfied and my father would have been too. When I explained what happened, my father said you made the right decision to leave that other meal. Then I prepared his lunch myself.
Imagine you are at a store to make a purchase and a stranger snatches two dollars out of your hand. What would you do; keep quiet, say something, or do something? When Cracker Barrel wouldn't honor the menu price, I felt as if they were attempting to steal my money.
There are two separate causes of action to file a lawsuit against Cracker Barrel; "breach of contract" and "Missouri Merchandise Practices Act".
The breach of contract damages is only one dollar per meal. However, sometimes it's not about the money as much as the principle of the thing. If this was a deliberate tactic to increase profits, Cracker Barrel would know most people would never consider going to court for such a small amount. How many hundreds or even thousands of customers were overcharged? Everyone has to decide how much principle is worth to them. I've certainly spent more than two dollars in time and effort researching and writing this article which for me was worth it. I'm not planning to file suit.
Since the MMPA includes the possibility of punitive damages, that might prompt someone to file a lawsuit or even a class action. If someone were to file a lawsuit, Cracker Barrel would have to pay an attorney to represent them which could cost tens of thousands of dollars depending on the number of motions and hearings. A judge could decide to teach Cracker Barrel a lesson and award thousands in punitive damages.
The solutions were simple; use labels to show the new price, verbally tell customers about the price changes or make the adjustment when a customer complains. The reality is many customers might not notice or might be too embarrassed to mention the price difference. My research revealed the Ferguson Cracker Barrel's online menu (PDF) included the $6.99 pricing on September 13th. The manager could have simply printed copies for temporary use until the corrected menus arrived.
Cracker Barrel violated the law. Every member of our party thought it was wrong for them not to correct their mistake. Hopefully, Cracker Barrel will learn from this and treat its customers more fairly in future situations.