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Hundreds of upstate schools, including 177 in Erie County, will benefit from a legal settlement reached between Hobby Lobby craft stores and the State Attorney General’s Office.

State Attorney General Eric T. Schneiderman on Wednesday announced that Hobby Lobby had entered into a settlement with his office following an investigation into alleged deceptive advertising practices by the national retail chain. Schneiderman’s office said Hobby Lobby, through its deceptive advertising, misled customers into thinking they were receiving steep discounts over a two-year period.

As part of the settlement, the company agreed to change its advertising practices over the next 60 days and to contribute $138,600 in supplies to 689 public schools in upstate in the vicinity of Hobby Lobby stores. There are outlets, in Depew, Blasdell, Amherst and Niagara Falls.

According to Casey Aguglia, a spokeswoman for the Attorney General’s Office, 177 schools in Erie County and 26 in Niagara County will be eligible to receive gift cards from Hobby Lobby to purchase student supplies.

“The items that were advertised as being on sale were things like custom framing, furniture and home decor, etc.,” Aguglia said. “However, the angle is, because it’s hard to identify individual victims in a case like this, the solution was to reimburse victims in the community, as a whole.

“Because Hobby Lobby sells schools supplies, that’s why they chose to go the route that they did with regard to the gift cards for local schools to purchase school supplies,” she added. The schools will be notified once they are eligible to receive the gift cards.

Some products marketed by Hobby Lobby as sale items were actually advertised that way for more than 52 consecutive weeks, which, according to the Attorney General’s Office, is a violation of the state’s General Business Law prohibiting false advertising. Sales that are never-ending are in violation of the false-advertising law.

The Oklahoma-based national retail chain in 2012 sued the U.S. government over regulations in the Affordable Care Act that required the company to provide emergency contraceptive coverage for its employees, which the family-owned company argued violated its religious beliefs. In January, the U.S. Supreme Court ruled that it would be a violation of the Establishment Clause of the First Amendment to allow the company to exclude specific health care coverage for its employees based on the religious beliefs of company executives.

email: hmcneil@buffnews.com