Consumer Payment Card News

Is The Price Right?

Do you ever worry that those electronic scanners dont really charge you the right price for the items youve chosen? The Federal Trade Commission (FTC), the Department of Commerces National Institute of Standards and Technology (NIST), and weights and measures offices in 37 jurisdictions, have recently conducted a survey of over 100,000 consumer products in all types of retail stores, and has concluded that pricing accuracy has improved over the first study in 1996.
Thats the good news. The bad news is that the wrong price was charged in approximately one in every 30 items checked in the survey. The report, entitled Price Check II, found that pricing errors for sale and non-sale items were about equal in number, however, overcharges accounted for two-thirds of the pricing errors on sale items.

A pricing error occurs when the price charged for an item at checkout does not agree with the lowest advertised, quoted, posted or marked price. These discrepancies can be overcharges or undercharges. Of course, inevitably, sometimes the problem can be attributed to human error.

The National Conference on Weights and Measures (NCWM) and NIST have jointly developed price verification procedures for implementation, and are encouraging all of their members to implement them in the interest of fair competition and consumer confidence in electronic price scanners. Forty-two states have thus far adopted these procedures.

Based on the price verification procedure, a store passes an inspection if 98 percent or more of the items sampled are priced accurately. This score is used to determine whether a store should be inspected more often, with higher levels of enforcement, such as state or local penalties or fines, being based only on overcharges.

Some of the statistics revealed by the 1998 survey, which was carried out in 1,033 retail stores in 36 states, are listed below:

–Wide variations were found in pricing accuracy from chain to chain and store to store. Food stores were found to have the highest pricing accuracy and hardware stores the lowest.

–Over 107,000 items were checked.

–3.5% of items were mispriced – half undercharges and half overcharges.

–The average undercharge was $5.28, and the average overcharge was $3.20.

–For sale items, pricing errors were found in 1 of every 28 items – two-thirds were overcharges.

–For non-sale items, pricing errors were found in 1 of every 32 items – one-third were overcharges.

–In 43% of the stores inspected, no pricing errors were found.

–71% of the stores passed initial inspection – as opposed to 45%in the 1996 survey.

Although there has been a measurable increase in accuracy since the 1996 survey, there is still room for improvement. Obviously, consumers can protect themselves by paying close attention to the prices that they are charged, particularly on sale items.

Copies of the 1998 and 1996 Price Check studies, as well as consumer and business education materials, are available from the FTCs web site at www.ftc.gov; by writing the FTCs Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; or by calling 202-FTC-HELP (202-382-4357) (TDD: 202-326-2502). The latest FTC news, as it is announced, is available through their NewsPhone recording at 202-326-2710.

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