Unit Prices Help Consumers, Not So Much Retailers
While Lee and I have been shopping by unit price for quite some time, I started wondering why would the stores even post unit prices in the first place. Researching a little, I see blogs stating that several states have laws requiring posting of unit price – of course there must be a law! Retailers wouldn’t want us to be able to comparison shop on a level playing field after all. So lets take a closer look at this.
Addendum – After we originally published this, Melanie Pinola over at Lifehacker published a great article on why the Unit Price that the retailer puts on those little stickers may not always be reliable. You should check it out.
Unit pricing is the most transparent and powerful tool we have to see the ‘real’ price a product is going for and we can make appropriate decisions based on this information. Transparency is in the interest of the consumer and not necessarily in the interest of the retailer which is why we have laws requiring unit pricing.
Of course, there is no law saying the unit price has to be on equal footing with the retail price so retailers make the unit price extra small and often highlight the product price with eye-catching yellow to distract you from the unit price.
In the examples we have here, doesn’t $2.98 seem like a much better deal than $5.92? But wait, what are those little numbers on the left and what are they telling me? They’re telling me I’m paying over 50% more for the same mayo in that smaller jar!
So where do these laws come from and who is responsible for enforcing them? If a retailer neglects to display a unit price or calculates incorrectly, do they risk a squad of police cars pulling up to the store front with warrants for the employee’s arrest? Maybe the sheriff or the FBI will show up at the manager’s home and book him?
The States Regulate Pricing
Pricing is regulated by each individual state and enforced by that state’s department responsible for weights and measures. These are the same guys who check the pumps at the local gas station and make sure they are delivering the amount of gas the pump says it is delivering. These regulators have the authority to levy fines. In some cases, violators can be charged in Civil and even Criminal Court. Labelling laws and regulations vary by state. In some cases it can even vary by county. Some states may not have any requirements or have varying degrees over item pricing or unit pricing. Of course, this makes it difficult for those retailers that operate in multiple states but hey, no sympathy for them! We’re focused on the difficulties of being a consumer! Unit pricing was largely started in the 1970s, Massachusetts being the first state to enact compulsory unit pricing on Jan 1, 1971. These laws require the price per unit weight, volume or hundred count be displayed on the item or the shelf. While originally implemented to benefit the poor, it seems neither the poor nor wealthy use this information very much. Rather it is the middle class who primarily uses unit price information when making purchasing decisions.