Outmoded Consumer Protection: The Incompatibility of Item Pricing Laws and Radio Frequency Identification

Introduction

Those of us over forty years of age can likely recall the grocery store of old, where “stock-boys” carried their price guns, with which they dutifully applied a price sticker to every can of corn, loaf of bread, and gallon of milk in the store. At the checkout counter, the “checker” did just that – check the surface of every item in the shopping cart for its price tag and then enter that price by punching numbers on the mechanical cash register. But bar codes and scanners eliminated the need for putting a price tag on every item a long time ago – right?

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Not entirely. Believe it or not, in 2009, in a significant number of US grocery stores – and many other categories of retail stores – still place individual price tags on almost every item they sell.

IPLs Still in Vogue

Why? It is simply because state and local laws require them to. These so-called “item pricing laws” (IPLs) were largely enacted as “consumer protection” measures in the 1970s and 1980s to protect against fears that consumers were being overcharged due to checkout scanning errors. Yet, these laws are still in vogue – as recently as 2005, New York City Mayor Michael Bloomberg signed a law which stiffened its municipal item pricing regulations. IPLs have been supported by not just consumer advocates, but by retail and grocery workers unions, who see the laws as protecting outmoded jobs. Currently, item pricing laws are in place in ten US states:

• Arizona
• California
• Connecticut
• Illinois
• Massachusetts
• Michigan
• New Hampshire
• New York
• North Dakota
• Rhode Island.  

Additionally, item pricing laws exist in several large metropolitan areas in otherwise non-IPL states, including Chicago and Philadelphia. In Michigan, the state’s IPL covers almost every item for sale in any retail outlet priced over 30 cents, while in other states, IPL laws are restricted to food stores. In Connecticut, retailers are exempted from that state’s IPL if they install electronic shelf labeling systems (at a cost of well in excess of $100,000 per store). Yet, the US is not unique in having IPLs, as similar regulations exist in Israel, as well as select provinces of Canada and even some European countries.