Price problems - More mismatches between what's on the shelf and what's at the register
Saturday, March 22, 2003 6:54AM EST
newsobserver.com
By SAMANTHA THOMPSON SMITH, Staff Writer
Hold on to that sales receipt. The register may be wrong more often than you think. State officials say that retailers' efforts to keep costs down by cutting staff has contributed to a rise in price errors scanned at the register.
So far this year, the state has levied $18,000 in civil fines against four retailers that have failed three consecutive price checks by state inspectors. That's up significantly from last year, when $9,000 in fines were collected during the entire year from seven retailers.
retailer policies
HARRIS TEETER: Shoppers who catch a price scanning error get the item for free, even if the price is scanned lower than the advertised price.
FOOD LION: Spot a scanning error at Food Lion and store managers will give customers another one of the same item free.
TARGET: Target store managers give back the difference in the price charged and the advertised price.
WAL-MART: If an error is found involving an item under $3, the customer is given the item for free. If an error is pointed out in an item that's priced more than $3, the customer gets $3 for catching the error plus the amount overcharged.
how to complain
Have you been overcharged at a store and found that the company isn'tcooperative about settling the dispute? Contact the Standards Division of the N.C. Department of Agriculture and Consumer Services at 733-3313.
Some of the problem stems from computer glitches, but more from human error, mostly on the store floor level. To keep prices low and to stay competitive in difficult retailing times, retailers have been forced to cut costs, often by employing fewer people. Less staff means the ability to quickly and accurately make price changes has slipped.
"Some stores have as many as 1,100 price changes a week," said Winston Sutton, director of the standards division of the state Department of Agriculture and Consumer Services, which enforces price accuracy. "And when they cut down on manpower, they don't have the time to restock the shelves, and they don't have the time to change the prices."
Kmart is among the worst violators of pricing laws. So far this year the bankrupt retailer has been fined about $7,000 by the state. A store in Monroe on a second inspection overcharged on 11 of 300 items. A Kmart in Jacksonville had a 4 percent error rate -- four overcharges on 100 items. And a Big Kmart in Laurinburg overcharged on 19 out of 300 items.
The discount chain is a notorious violator nationwide. In Arizona, a state inspection survey last year found that four out of every 10 stores charged customers the wrong price, with Kmart leading the failure rate, not passing 85 percent of the times it was inspected. Kmart has also had problems in Wisconsin, Utah and Massachusetts.
Other violators in North Carolina include a Winn-Dixie store in Stallings, fined $1,370, and an Advance Auto Parts in Salisbury, which paid $720 in fines. At that store, 21 out of 300 items scanned were wrong.
North Carolina retailers -- except for stores that put price labels on every item, such as department stores -- are routinely and randomly checked by the state for price errors. Eight state workers check prices full time. An additional 14 split price-checking duties with making sure that gas stations are doling out the right amount per gallon.
Inspectors initially check prices on 25 or 50 items, depending on the store's size. If one item is overcharged, an additional 25 items are scanned. If there is one overcharge, the store fails. The state sends the store a letter, and 30 days later, the store is inspected again. The next time as many as 400 items are scanned. If overcharges are more than 2 percent, the store fails again. Another letter is sent, and the store gets inspected a third time. That time, if it fails 2 percent or more on up to 400 items, the store can be fined $150 plus $15 per item for every overcharged item, up to $5,000. The fines have been higher so far this year because inspectors have found so many overcharged items in each store.
Up until retailers were forced to trim expenses as the economy slowed, price errors had been falling throughout the nation, mostly because technology for both cash registers and back-end systems have improved.
The Federal Trade Commission found in 1998 that one out of 30 items scanned were mispriced. The same study in 1996 found that one in 21 items were mischarged.
Drugstores, however, are the worst offenders, a Chicago study found last year, with Walgreens leading with overcharges at 67 stores. That study also found that 58 percent of Chicago retailers overcharged customers.
Grocery stores also are known violators. Three years ago, the FTC and the U.S. Department of Commerce found that in a sample of 515 groceries, 23 percent had price scanning errors of more than 2 percent.
Sutton said most stores aren't trying to cheat shoppers. "They don't want to cause bad feelings among shoppers," he said. "It's human error. They're not able to cover the amount of work that needs to be done."
It used to be that all products, whether at a department store or a grocery, had an individual price. Store clerks had to manually key the price into a register. And shoppers could easily check for errors because the price was labeled on the product.
When retailers began adopting bar code scanning technology, developed by IBM in Raleigh, back in the late 1970s, the results were dramatic: Checkout lines moved quicker; labor costs were slashed; inventory controls improved; and pricing errors dropped because store clerks were no longer manually entering prices.
But shoppers lost their ability to easily spot problems.
Now shoppers have to be more savvy than ever, said Jennifer Shecter, a spokeswoman for Consumer Reports magazine. "You've really got to be paying close attention at the store, looking at the price on the shelf," she said.
The shelves are where most of the problems start. National retailers key in prices at the corporate headquarters and then electronically send the changes to store managers. Store managers are then responsible for making sure all the changes are labeled on the shelf, a time-consuming process that can take hours a day.
"Any pricing errors that happen are usually human error," said Jim Williams, a spokesman for Wal-Mart.
Wal-Mart's system is a little different than most. Wal-Mart store managers are given the flexibility to change prices to stay competitive with other retailers in their market. But the prices don't always make it into the system or on the shelf.
As a result, Wal-Mart has one of the most generous policies on pricing errors. If an error is found involving an item under $3, the customer is given the item for free. If an error is pointed out in an item that's priced over $3, the customer gets $3 for catching the error plus the difference if it's an overcharge.
The company is testing electronic shelf signs in some stores, Williams said. If implemented, the technology would give Wal-Mart flexibility to move more quickly in matching prices and also help to reduce errors.
Others, like Home Depot, have cut down on errors by using "mobile ordering carts," remote computer pricing systems that move around the store, allowing clerks to receive electronic messages from a server in the back of the store about price changes, then print out labels and stick the price right on the shelf. The system can also update inventory and check sales volumes throughout the year.
"Before that technology, if you were a department supervisor, you did it all by hand on the back of a clipboard," said Don Harrison, a Home Depot spokesman. "This way, they have a personal computer on a cart."
Staff writer Samantha Smith can be reached at 829-4563 or samantha@newsobserver.com. |
