Romney proposes item-pricing alternative
boston.com
By Andrew Caffrey, Globe Staff, 2/27/2003
Governor Mitt Romney is proposing to allow retailers to use electronic pricing machines, such as in-aisle scanners, as a substitute for placing individual price tags on most products in their stores, as they're currently required to do in Massachusetts.
The governor's proposal, if adopted by the Legislature, would deliver a huge victory to retailers, who have long complained the Massachusetts requirement is costly and can introduce pricing errors. Several chain stores were hit with class-action suits in recent months alleging they've failed to follow the Massachusetts item-price rule after Home Depot settled a similar suit in November for $3.8 million.
Tucked into the back of the fiscal year 2004 budget Romney released yesterday, the provision would allow supermarkets and other retailers to receive waivers from the item-pricing rules if they pay a fee to the state and place scanners in aisles where shoppers could quickly check prices. Stores could elect to install so-called electronic pricing labels on shelves below the products that digitally display prices, or keep the paper strips displaying prices that are pasted to shelves now.
While the proposal would clearly benefit retailers, for consumers ''the price accuracy benefit is very big,'' said Beth Lindstrom, director of the state Office of Consumer Affairs and Business Regulation, because it would reduce the number of errors that can occur when a price on the individual paper label doesn't agree with the price at the computerized checkout counter. Lindstrom said an electronic system would be more accurate because the aisle scanners, check-out scanners, and electronic shelf labels would be updated simultaneously from the retailer's central computer.
The waiver fee would be based on the number of registers per store - $2,000 for stores with seven registers or more, for example and less for stores with fewer registers. Romney administration officials estimate the waivers could generate $3 million or more in revenues.
As a protection for consumers, Lindstrom said retailers that use the electronic system could not raise prices on items more than once within a 72-hour period. Fines for price errors would be doubled, to $200 per item.
Romney's legislation was hailed by retailers and slammed by consumer advocates.
Chris Flynn, president of the Massachusetts Food Association, which represents supermarkets said, ''If you're going to have to individual item price, there are going to be mistakes. It's a set-up for failure.''
Consumer activists accused Romney of caving in to business interests.
''What they're doing is continuing pushing functions that belong to the retailers back onto consumers,'' said Colman Herman, a Dorchester resident who has staged a one-man enforcement action against retailers.
Edgar Dworsky, who authored the original item-pricing law while at the state consumer affairs office in the 1980s, said the electronic scanners would do little to improve pricing accuracy.
''The biggest reason there are scanning errors is because some lame brain at company headquarters didn't input the cost of the goods'' into the retailer's central computer, Dworsky said.
A spokeswoman for Attorney General Thomas Reilly, who has been studying the need to enforce regulations against non-food retailers, said Reilly's office had just received the Romney proposal and had no comment.
State Representative Michael J. Rodrigues, a Westport Democrat, who has sponsored similar electronic pricing legislation in the past, said he couldn't support Romney's proposal if it didn't require stores to install the expensive electronic pricing systems on the front of shelves for added protection.
''Change is difficult, but if we can ensure the price on the shelf is what the consumer pays, and provide opportunities for consumers to check the right price, then we haven't lost any consumer protection,'' Rodrigues said.
Andrew Caffrey can be reached at caffrey@globe.com.
This story ran on page C1 of the Boston Globe on 2/27/2003.
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