(Reuters) - Walmart ( WMT ) must face a lawsuit claiming it often charges higher prices at the register than it posts on store shelves, costing consumers hundreds of millions of dollars a year, a federal appeals court ruled on Wednesday.

Reversing a lower court judge, the 7th U.S. Circuit Court of Appeals in Chicago said consumers could try to prove in their proposed class action that the conduct of the world's largest retailer was a fraudulent "bait-and-switch" that violated several states' consumer protection laws.

It also rejected Walmart's ( WMT ) argument that providing receipts after purchases negated any unfairness caused by inaccurate shelf prices.

Circuit Judge David Hamilton wrote for a three-judge panel that it was "neither unreasonable nor fanciful" for consumers to believe Walmart ( WMT ) would charge the prices displayed on shelves.

Walmart ( WMT ), based in Bentonville, Arkansas, and its lawyers did not immediately respond to requests for comment. The named plaintiff, Yoram Kahn, is from the Cleveland area.

Lawyers for the consumers said they found price discrepancies in Florida, Illinois, Indiana, Maryland, New Jersey and New York, as well as in North Carolina even after a regulator there fined Walmart ( WMT ) in 2022 for price-scanning errors.

The lawyers said most discrepancies were small - one Walmart ( WMT ) in New Jersey charged $3.64 for Crisco Pure Canola Oil versus the $3.12 shelf price, while another charged $2.48 for Hershey's Chocolate Syrup versus the $2.33 shelf price - but that they added up fast.

Hamilton said consumers cannot be expected to always keep an eagle eye at checkout, where they might be distracted by young children, tabloid headlines, pulling out their wallets or bagging their merchandise.

Nor, he said, is it reasonable to force consumers to keep track of shelf prices, whether by memory or by creating a record, as they shop.

"Who does that?" he wrote.

The appeals court returned the case to U.S. District Judge Sara Ellis in Chicago, who dismissed it in March 2023.

"We are pleased with the opinion and look forward to vindicating the rights of Walmart ( WMT ) customers," said Stanley Bernstein, a lawyer for the plaintiffs.

The case is Kahn v Walmart Inc ( WMT ), 7th U.S. Circuit Court of Appeals, No. 23-1751.