Matson started telling the officers what Hudson was wearing, but he was interrupted when she said: "Tell them I'll be here when they arrive. You can tell them her name is Camilla Hudson. I have ID and will share it."
He then spelled the woman's name for the officers to which Hudson responded: "Exactly, like the river."
Matson identified himself to authorities before telling the police that Hudson was African-American.
"No I'm not African-American. I'm black. Black isn't a bad word," Hudson said just moments before Matson hung up the phone and retreated into his office.
The video has been viewed more than 14,000 times since Hudson shared it on Facebook on Saturday.
When Camilla Hudson asked for his name and title, he "became agitated and rude". Photo / Facebook
She said she was trying to use the CVS coupon, which was for a free item related to a health issue, at the store located on 6150 N. Broadway in Chicago.
"I stopped in to make a purchase using a coupon mailed to me by the product manufacturer, as replacement for problematic/defective product.
"The manager [Matson] on duty said that he'd never seen a coupon like the one I had and said that he thought it was fraudulent," Hudson wrote.
When she asked for his name and title, he "became agitated and rude".
Camilla Hudson said she was trying to use the CVS coupon (pictured), which was for a free item related to a health issue, at the store located on 6150 N. Broadway in Chicago. Photo / Facebook
According to Hudson, she pulled out her phone to document the incident when Matson ran to the back of the store and slammed a door in her face.
"Meanwhile, the other manager, who'd been helping me initially, came running back to tell me that I'd better leave the store immediately, because he'd called the police," Hudson wrote.
"Of course, I had zero concerns about the police being called. Apparently, they'd hung up on him the first time he called, so he had to call them back a second time, telling the 911 dispatcher that I was harassing them.
"Three tactical unit officers arrived and, after some conversation and documenting their names, badge numbers, etc, I eventually left the store. Needless to say, this is far from over. Life in these United States. Aargh," Hudson said.
Hudson was later contacted by CVS administrators who apologised to her over the incident.
Morry Matson, who was a delegate for Donald Trump during his 2016 campaign, is running for alderman of the 48th Ward in 2019. Photo / Facebook
A CVS corporate spokesman said in a statement to Block Club Chicago that the company has "begun an investigation and we will take any corrective action that is warranted to prevent it from happening again.
"CVS Pharmacy does not tolerate any practices that discriminate against any customer and we are committed to maintaining a welcoming and diverse environment in our stores," the statement read.
"We have firm non-discrimination policies in place to help ensure that all customers are treated with respect and dignity. Profiling or any other type of discriminatory behavior is strictly prohibited."
Matson, who was a delegate for Donald Trump during his 2016 campaign, is running for alderman of the 48th Ward on Chicago's Far North Side in the 2019 election.
He is also the President of the Illinois chapter of the Log Cabin Republicans group, a GOP group that advocates for LGBT rights.
Matson joins the ranks of Barbecue Becky, Permit Patty, Permit Betty and Pool Patrol Paula, all of whom have called authorities on African-Americans or other minorities.
So my little cousin was selling water and didn't have a permit so this lady decided to call the cops on an 8 year old. #PermitPattypic.twitter.com/SiL61pnAgl
Most recently, Permit Betty made headlines after she called authorities on a vendor. Permit Betty had questioned whether or not the vendor had a seller's license.