Friday, December 21, 2012

Grocery stores have a hard time pricing

My local City Market is probably like many City Markets, and many other supermarkets, in that every week they change the prices on thousands (probably tens of thousands) of items.  When they raise the price, it's often accompanied with a larger sticker that screams in red letters, "Low Price!"  They rarely lower the price, but often have sales.  Every week they put many items on sale, and a week or two later, those same items go off of sale price (or switch to a different sale price).  I have no idea why they do this.  Some of the sale items reflect promotions from the manufacturers, but the rest are a mystery.

The biggest problem with their frequent re-pricing is rampant mis-pricing.  Either they forget to enter the new price (or sale price) into the computer, or they forget to remove the sale price tag.  Either way, there's hardly a week that I don't get an incorrect price at check-out.  Now if I'm lucky, the friendly U-Scan clerk will void my item and I get it free.  If I'm not lucky, I have to stand in line at the customer service desk to get my item refunded.  If I'm really unlucky, I get a new employee who doesn't know the store policy (and has no interest in finding out what it is), and I'll be given an excuse instead of  refund.  "We forgot to take down the sign."  So?  That's not my fault.  Honor the posted price.  

Here's a story from The Consumerist (one of my favorite websites) that offers a partial explanation:

Odds are that you’ve been overcharged at some point in your life. Mistakes happen. The big question is: Is there any acceptable level of overcharging?
This is what we’re left wondering after seeing the latest investigation by CBS 5 in San Francisco into an apparent overcharging problem at Safeway stores.
As we told you about in November, undercover reporters were not only being overcharged at Safeway stores, but many of these stores were in violation of a court order requiring them to either give the customer the overcharged item for free or a $5 gift card.
A new investigation of various inspection records found that customers are overcharged on 1 out of 50 items purchased at a Safeway or Safeway-owned store (including Vons, Dominick’s Finer Foods, Randall’s and Tom Thumb).
Safeway counters that this rate of overcharges is “squarely within industry norms,” and cites the California Dept. of Food & Agriculture’s 2011 Statewide Price Verification Survey. Indeed, that survey [PDF] did find a statewide average of 1.97% in overcharges for all the retail businesses surveyed. Grocery stores demonstrated a slightly higher rate (2.15%) but still close to the 1-in-50 number CBS 5 found for Safeway.
“[W]e would never be satisfied with just being average when it comes to pricing accuracy,” writes Safeway in response to the CBS report, adding, “indeed, we are confident that our actual performance is even better than the 98% accuracy rate you attribute to Safeway.”
Safeway attributes the pricing errors to the large variety of items it sells. A rep for the Federal Trade Commission tells CBS that while “complexity creates problems… you know you don’t need to be NASA or the CIA to figure out how to get the prices right.”
It’s worth pointing out that grocery stores were not even the worst overchargers in the Price Verification Survey. Auto parts and supply, health and nutrition stores, postal and office supply, electronics and appliances, and drug stores all demonstrated higher rates of overcharging customers.
Safeway claims that has a “strict set of policies and systems” to minimize pricing errors, including self-auditing of stores. And yet it’s been sued twice in the last decade by the state of California for overcharging. So either it’s not doing enough or there is a limit to how accurate grocery stores can be.
What’s more important — and more easily remedied — is how stores train employees to handle overcharges. As demonstrated by November’s undercover report, workers and managers at the Safeway stores involved were either unaware of or misinformed about the company’s court-ordered policy of refunds for overcharged items.
Not only should every employee from the manager on down be fully versed in this policy, it should actually be the policy at stores regardless of whether or not the court has ordered it. Minor penalties to the store coupled with rewards for observant customers can only help.