UNIT PRICING AND ELECTRONIC SHELF LABELS - November 9, 2000
OLR Research Report 2000-R-1044 (Revised)
By: Veronica Rose, Principal Analyst
You want to know if (1) other states require businesses that use Universal Product Coding (UPC) to total a consumer's purchases to (a) mark each item with its price or (b) put the unit price on items, (2) other states require businesses that use electronic shelf labeling (ESL) systems to meet certain standards, and (3) states that place requirements on ESL systems allow alternative systems.
SUMMARY
We identified five states with pricing requirements: California and Rhode Island address both item and unit pricing; Massachusetts and Michigan, address item pricing; and New Jersey addresses unit pricing. The "unit price" is the retail price of the item (item price) expressed in terms of price per unit of weight, measure, or count.
We found only one state (New Jersey) that requires unit price labels (ESL or other) to meet standards and be approved before they are used. But Massachusetts also set standards for ESL use in a 1998 test program. And 42 states, including Connecticut, have adopted the National Institute of Standards and Technology Handbook 130 standards, which, as part of the price verification requirements, specify scanner accuracy procedures regardless of the system.
According to Connecticut's Department of Consumer Protection (DCP), New Jersey has indicated that ESL use is permissible under New Jersey's regulations if the director of the Division of Consumer Affairs approves the system. But no one has applied to use it. New Jersey has informed DCP that, if used, the ESL system must meet current unit pricing requirements.
PRICING REQUIREMENTS
California
California requires retail grocery stores or grocery departments in general retail merchandise stores that use automatic checkout systems (computers that interpret UPC or similar codes) to have clearly readable prices on 85% of the total number of packaged items offered for sale. The law exempts, among other commodities, unpackaged fresh food produce and items below a certain size, items on sale or special, vending machine items, and identical items in multi-item packages (Cal. Civil Code §§ 7100 to 7106).
With regard to unit pricing, the law requires the Department of Consumer Affairs in cooperation with the retail food industry to adopt a standard format for unit pricing and make it available to retailers upon request. The format must include the brand name, item price, volume, weight, number of units, and unit price. The stated legislative intent is to encourage unit pricing of certain goods, including: canned, bottled, and packaged foods; packaged produce; bakery goods; paper, plastic, wood, and metal products packaged in counts of more than 10; rolled paper, plastic, and metal products; canned, bottled, and packaged domestic, laundry and household cleansing, finishing, waxing, and polishing products; drug and first aid products canned, packaged, or bottled in counts of more than 10; and frozen fruits and vegetables (Cal. Business and Professional Code §§ 12655 & 12656).
Massachusetts
Massachusetts law, with exceptions, requires items in food stores and grocery items in food departments to have each item individually priced. It exempts, among other commodities, gallons and half gallons of milk, eggs, cigarettes and cigarette products, individual units in multi-unit packages, snack foods, individual greeting cards marked with a readily understandable price code, and soft drink bottles and cans (Mass. Gen. Laws Ann. 94 § 184C). Food stores and food departments that use automatic check out systems for most of the items they sell may also exempt an additional 400 items following statutory standards, if the director of standards determines that the systems are at least 95% accurate (Mass. Gen. Laws Ann. 94 § 184D).
Michigan
Michigan law, with exemptions, requires that the total price of a consumer item displayed or offered for sale at retail must be clearly and conspicuously shown and must be stamped or affixed to the consumer item. Exemptions include items sold in coin-operated vending machines, unpackaged consumer items sold by weight or volume, unpackaged food items, prepared foods intended for immediate consumption, items below a certain weight and volume, and packages of 20 or fewer cigarettes. In addition to the exemptions, a retailer may choose to not individually price up to 25 classes of items or individual items and up to 25 additional classes of items or individual items advertised or featured at a reduced price (Michigan Stat. Ann. § 445.353).
New Jersey
New Jersey law requires items to be marked by a stamp, tag, label, or sign at the point of display with the price per unit or other measure (NJAC 56:8-23). It exempts, among other commodities, prescription drugs, vitamins, consumer products commingled with other consumer commodities for purposes of a one-price list, snack foods below a certain weight, frozen foods, and ice cream. The Division of Consumer Affairs by regulation provides for the manner in which unit prices must be calculated and displayed and also establishes a list of exempt commodities and establishments (N.J. Stat. Ann. § 56:8-24).
Rhode Island
By law, retailers must disclose the unit price of the following items: foil, bread, carbonated soft drinks, cereals, cooking oils, dog and cat food, facial tissues, fish, fowl, fruits, grains, meats, napkins, plastic food wrapping, vegetables, waxed paper, and other items the director of business regulation designates.
Retailers must disclose the item price of all consumer commodities, except prescription drugs. They must disclose prices by attaching a stamp, tag, or label directly adjacent to the item or by putting the price information on the item or, if the item or price information is not conspicuously visible to the consumer, they may post the price conspicuously near the point of procurement (R.I. § 6-31-3). The director designates the unit of weight, measure, or count in terms of which the unit price of the covered items must be expressed (R.I. Gen. Laws § 6-31-5).
ELECTRONIC SHELF LABELING STANDARDS
We identified 42 states that have adopted and use National Institute of Standards and Technology Handbook 130 standards, which as part of the price verification requirements specify scanner accuracy procedures regardless of the system. We found only one state (New Jersey) that requires that unit price labels meet standards. New Jersey does not distinguish between electronic shelf and other labels. Also, in a 1998 pilot program, Massachusetts set its own standards for ESL. The standards for both states are discussed below.
New Jersey
New Jersey requires that a sample format of unit price labels be submitted to the director of consumer affairs for approval prior to display. The director must follow the following standards when considering approval:
1. The shelf label must be divided vertically or horizontally into two portions. The size and conspicuousness of the numbers showing the retail price must be equal to or greater than for the unit price. Where the retail price exceeds the unit price, the typeface for the unit price must be not less than 50% of that for the retail price.
2. The left side or upper portion of the tag is to be known as the unit price side and must contain the term "unit price"; numerical unit price in bold figures; and approved unit of measure.
3. The right side or lower portion must contain the following information: the term "retail price," "you pay," or something similar; the numerical retail price: and the quantity or size of the commodity.
4. A description of the commodity must be on the unit price shelf label.
5. Additional stock or code information may appear on the unit price shelf label.
6. Letters and numbers must be conspicuous, clear, and legible.
7. The overall design of the label must convey all the information in a clear, readable, and conspicuous fashion. Stock or code information cannot obscure or de-emphasize the consumer information appearing on the unit price label (NJ Agency Reg. § 13:45A-14.7).
Massachusetts
Massachusetts set the following standards for retailers when it tested ESL systems in conjunction with price check out scanners in food stores and food departments. ESLs were used for exempt items only and were subject to the following guidelines and standards:
1. Only systems that used an in-store host computer would be approved.
2. Once a price was programmed into the host computer system for any electronic shelf priced item, the price would remain in effect for 72 hours unless reduced or changed to correct an obvious pricing error, and all price changes entered into the system would be certified by the store manager or designee before the start of any advertised sale and a copy of such certification maintained on file.
3. Alternative consumer price devices had to be available.
4. Approved scanners to verify prices had to be strategically located throughout the shopping area.
5. Price changes had to be implemented during off-peak hours to ensure maximum pricing accuracy at all times.
6. Advertisements had to include a statement about the effective date (or time) of price changes for sale items, and all price changes had to be made before then.
7. Participating stores had to have price accuracy guarantees.
cga.state.ct.us |
