The hidden costs of poor pricing verification
Every consumer has had the experience of being undercharged or overcharged for an item at a retail store, either noticing the mistake at the register or not realizing the error until they got home and reviewed the receipt.
This scenario happens frequently. In fact, a recent Anyline survey reveals that 53% of shoppers sometimes or frequently notice a difference between the displayed price of an item and what they are charged at the register.
A big reason for these reoccurring pricing issues has to do with human error. Store prices are prone to be changed from week to week, which means that store associates must perform manual matching on data prices versus displayed prices for thousands of SKUs. If stores rely on staff to manually ensure that displayed prices match those in the store database, they are practically inviting errors and mistakes at alarming rates.
Poor pricing verification can severely affect a retailer’s bottom line – in more ways than one. Let’s take a look at the hidden costs of pricing errors and what retailers can do to address this costly issue.
The Cost of Legal Action
The problem of poor pricing verification is pervasive enough that states have started to enact laws that protect consumers from wrongly priced items. For instance, as of Sept. 1, 2020, Michigan enacted the Michigan Price Scanner Law, which requires that most items on store shelves display a price clearly and reasonably convey the correct cost to a consumer.
The law states that if a shopper is overcharged for an item, they are entitled to a refund worth the difference between the amount charged and the price displayed plus a “bonus” 10 times the difference. If the seller refuses to give the buyer both the refund and the bonus, the buyer may bring a lawsuit to recover actual damages.
Massachusetts has similar laws in place to guarantee price accuracy and protect consumers. For example, a food store or food department may be fined $100 for any item that scans higher than the lowest advertised, marked or shelf tag price. As well, grocery items must ring up at the lowest displayed price. Otherwise, sellers in the waiver program must offer consumers one of the items free.
It’s only a matter of time before other U.S. states follow suit with their own specific rules on consumer pricing regulations. Retailers must consider the cost of handling these disputes, along with the amount of labor time and cost adjustments managing these refunds.
The cost of customer loyalty and public trust
The growth of e-commerce means shoppers are making fewer in-store visits but spending more per trip. Retailers must ensure that each visit is seamless and without error, including pricing. Shoppers want to know that the price on an item is accurate for their decision-making process.
If there is a pricing mistake, retailers must honor all sales as an act of goodwill, even if there is no legal regulation in that area yet. Otherwise, it can be detrimental to the shopping experience and decrease customer loyalty and company trust.
The value of barcode and OCR scanning for price verification
To avoid these costs and mitigate the problem of incorrect pricing, retailers can equip employees with scanning-enabled mobile apps that optimize price verification processes. Optical character recognition (OCR) scanning is one way that retailers can automatically check if the displayed price matches the price in the database. All associates have to do is scan the displaced price in combination with the Universal Product Code (UPC) with their mobile device and any discrepancy can be shown in real time.
In addition to OCR, barcode scanning-enabled mobile apps can raise the efficiency of retail operations and price management. Rather than relying on dedicated scanning devices, new associates can simply download an app with an enterprise-grade barcode scanner to their own device or any standard smartphone so they can capture and process barcode information as securely, accurately and quickly as possible.
Level up your price verification to improve accuracy
Making price accuracy a top priority increases consumer loyalty and public trust in retailers, and also saves the embarrassment of being called out for mistakes through legal action. By using OCR and barcode scanning-enabled mobile apps, retailers can ensure that displayed pricing and database pricing matches, dramatically removing timely and common manual data entry errors and guaranteeing accurate prices at all times.
Christoph Braunsberger is president of Anyline Inc.
