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An Essay by Zelda Gordon, No-Cards Shoppers
Once upon a time, in the days before the proliferation of bar codes, most packaged merchandise was labeled with something called a "price tag." It was affixed to the product or printed on the packaging, and it told the price of the item in actual dollars and cents. This made raising the price of items already tagged and on the shelf rather labor intensive, as all the old tags had to be removed or marked out. If a product was brought to the register with two different prices, the merchant was required by law to charge the lower of the two. Today, merchandise is packaged with identifying bar codes which are scanned into a computerized register which reads the code and "rings up" the item at a price pre-programmed into the system. The retailer is spared the labor of putting a price tag on every item and replacing tags when prices change. A sign or shelf label tells the customer how much any given product will cost. The retailer is only required to insure that the posted price and the price in the computer agree. (Should the consumer not manage to remember or write down the posted prices on the fifteen or twenty items she now takes, tagless, to the checkout, and then be overcharged for one of them, that is her tough luck.) After bar codes for the products came bar codes for the customers. In our technological age, why not make it easy for the stores to "reward" their "loyal" customers with "lower" prices? Enter shopper club cards: Now selected items in your supermarket are posted with two prices -- a higher one for unregistered customers, and a lower one those who present the bar-coded ID card. When your bar code meets the product bar code, Voila! -- the computer charges you the lower price. Exactly how is this double-pricing/ID scheme dishonest, discriminatory and subject to abuse? Let me count the ways! * The FTC instructs merchants that in order for an item to be honestly advertised at a "sale" price, it must have been offered at a former non-sale price for a period of time. This is sometimes referred to as the "customary and average" price. Stores get around this rule by using a different vocabulary -- words like "special," "value" or "savings." Nonetheless, they are clearly touting the lower prices as representing discounts from the higher "regular" prices. The reality of the pricing, as every shopper knows, is that while there are some bargains to be found, more often the "special" price is close to the price we would expect to pay, while the regular price is exorbitant, representing not a "sale" to the card holder but a penalty to everyone else. As such, claims of "savings," from the cash register receipt ("you saved $...") to the freeway billboard, are blatant misrepresentations. (The truthful receipt should say, "You avoided a penalty of $...") Put simply, two-tiered pricing comes hand-in-hand with false advertising. * Perhaps you do feel you "save" when you shop with a card. Now, is that because the store beat another store's price or because they beat their own price? Used to be, stores competed with each other. They looked at prices charged by their competition and sought to woo customers with better prices, products and services. Now the competition is not between the stores but between the customers. Now a single store can inflate a price for one class of customer to make another class of customer feel "special." Now the merchant next door can look over his shoulder and see that Grocery A has one product marked with two prices; and if Grocery B can beat that inflated non-card-holder price, Grocery B can also claim that "you saved." In this way all stores are drawn into the price inflation and false advertising that comes with two-tiered pricing, even those that don't have card programs. Further, as small grocers are bought out by larger stores and as single corporations operate multiple chains under different names, you may find that Grocery A and Grocery B are one and the same. What looks like price competition is really price coordination. That's a monopolistic ploy, and we have anti-trust laws in this country to prevent just such unfair business practices. * Let's talk about "rewards" and "service." The stores claim that their card programs offer "rewards" to frequent customers and provide the tools they need to "serve you better." But who is really being rewarded and who is being served? Unlike a flat percentage discount (10% off) or a special offered with a volume buy (free turkey with $100 purchase), two-tiered item-by-item pricing provides retailers with a good deal more predictability regarding sales and inventory. They know exactly which items you buy. They know exactly what "specials" you fall for. They know where to take a loss on a product to get people into the store, and they know where to make up the difference in higher prices elsewhere. How do they know? We tell them every time we shop with a card! The two-tiered pricing system combined with the massive amounts of data being collected allow stores to manipulate our buying habits to insure their profits. Excuse me, but who did you say was being served?! * Another claim the stores make is that their card schemes are "fair and nondiscriminatory" because "the cards are free and available to all." Let's start with, "The cards are free." The cards are not free. We pay for them with our personal information and buying data. This data is a very valuable commodity, as we have seen. Not only do the stores use it to increase profits, but the marketing industry can and does sell such information by the data field, measuring the worth of our personal information in actual pennies per factoid. For the consumers, the price of this information is nothing less than our privacy and possibly even our liberty. How would you like to have records of your liquor purchases used against you in traffic court? Which brings me to a very basic, gut reaction I have when I'm told that "the cards are free": Yeah, and the Nazis gave away their armbands and tattoos for free too! Now we come to the second half of this formula: "The pricing is not discriminatory because the cards are available to all." Another version of this goes, "You don't have to have a card, you just won't get the discounts." It's hard to rebut logic like that, but let me try. Yes, the card is "available" to all, but not the lower tier of pricing. The "specials" are specifically denied to those who refuse to "sign up." But refusing to sign up is not the same thing as choosing to pay more! No one "chooses" to pay more. I avoid the cards because, per the above association, I have a deep loathing for such ID systems. Likewise, there are those who object to being "numbered" on religious grounds, and many who object for philosophical reasons unrelated to any religious identity or creed. In this country, how we think and what we believe is not just cause for unequal treatment. Charging some people more for food because they will not comply with a system that is morally or intellectually abhorrent to us is absolutely discrimination. Take a look into the future with me, if you feel I'm being over-sensitive. Today I must pay $1 more than my neighbor does for a gallon of milk because I refuse to have a store ID card. Perhaps I'm willing to accept that as a "privacy tax," for now. Meanwhile, other customers, unwilling to pay the tax, are falsifying information so they can get card prices without surrendering their personal information. In an effort to crack down and make sure that each customer is who his card says he is, the stores then require a fingerprint with the card. Since this is more intrusive, more customers reject the scheme and the store must raise the stakes -- now if you don't want to be fingerprinted, you can pay $10 more for milk. What's to stop them? "Everyone has a fingerprint," they say, "and the card is free." (And don't forget the classic, "There's no law against making a profit." Fingerprinting costs money, you know.) Pretty soon, we might be paying $100 for a gallon of milk -- unless we give up our DNA at a bio-bar-code station at the check-out counter. Think it can't happen? A precedent for just such a scenario is being set right now at your local grocery store. * Finally, let me address the "fairness" factor from a different perspective. Suppose, for the sake of argument, that we agree that the loyalty card system is nondiscriminatory in theory. It must also be nondiscriminatory in practice. In fact it is not. Here in Albuquerque we have seen that when pressure is applied by consumers, and a little negative publicity starts appearing in the media, stores soften on their card program implementation. A troublesome customer can get the lower prices without the card. The cashier or manager can override the system with a "cashier's card" -- this has been done for me. In this instance, who is being treated unfairly? All of those card-carrying customers who have surrendered information in exchange for a "discount" which I received "for free." (Not really free, though, if you count the stress factor of having these confrontations.) The point is, the more "the rules" are allowed to flex, the more arbitrary and unfair the system becomes. When a cashier can determine, off the cuff, who will be charged which prices, you have a system subject to all kinds of abuse. The greater the discrepancy between those two tiers of pricing, the greater the pressure on the customer to either comply with the rules or circumvent them; and the greater the pressure on the merchant to enforce the system, perhaps by imposing even more "conditions" on the "sale." In summary, we cannot expect to see an end to these privacy-invading "club card" schemes unless the stores are denied the prime incentive used to get people to "sign up" -- two-tiered pricing. There is a simple way to combat such systems -- reject them! When you are in a shopper card store, insist on receiving the lower prices without showing an ID card. State clearly that you do not accept the validity or the legality of the system. Walk away and leave your items on the conveyor belt if you do not get satisfaction. When employees are slowed down by having to return goods to the shelves, void sales, and quarrel with customers, and as lines lengthen at the check-out counters, management will realize that two-tiered pricing just isn't as profitable as it looks. Demand that your grocer earn your "loyalty" the old fashioned way -- with fair pricing, honest advertising and real customer service. ---Zelda Gordon, 10/99
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