Abstract of the Council’s position:
The Israel Consumer Council has examined the advantages and disadvantages of the proposed amendment to the law, compared with the existing situation, and has come to conclusion that it would oppose the proposed amendment to the law, unless significant changes were inserted to protect the principles of allowing price comparisons and lessening the impact caused by differences between the marked price and the price at the check-out.
General:
In examining the proposed amendment, the Consumer Council kept in mind two guiding principles:
1. Ensuring the consumer’s ability to make comparisons:
a. Between prices for similar products, under different brand names, within the same store.
b. Between prices for the same product in different stores.
2. Lessening the negative impact of differences between the marked price and the price at the check-out.
Details:
1. Advantages of the Proposed Law
a. Elimination of the phenomenon of differentials between the price marked on the product and the price at the checkout: complaints received by the Consumer Council indicate that this is a common phenomenon, both in small stores and in the large retail chain stores. The Consumer Council has come to the conclusion that the remedy available under the law – that the consumer may sue for compensation, up to the sum of 10,000 Shekels, without having to prove damages – has not yet proven to be effective. There are two reasons for this: first, only a few consumers actually become aware of these price differences – those who do not cannot realize that they are entitled to compensation. Second, the number of consumers who make the effort to sue the offending businesses is very small, and so the law’s deterrent effect is limited. In the new proposal, the prices at the check-out and on the shelf display will be linked to the same computer, and so the phenomenon of price differentials should be eliminated.
b. Immediate display of special offers or their cancellation: One phenomenon encountered by almost all consumers is that of the cancelation or expiration of special offers, while the reduced price is still marked on the shelf (with no indication of an expiration date for the special price). Many consumers are not aware that they can demand to be charged the advertised reduced price, while others do not notice them; both groups are disadvantaged by having to pay a higher price. The use of electronic displays, connected to the check-out computer, will enable special prices to be updated in real time, thus saving consumers from being misled.
c. Prominence for the unit price: an important comparison tool for consumers, which has come into use in recent years, is the marking of the unit price for products (price per kilogram or pound, price per liter or quart, and so on), either on the product itself or on the price label affixed to the shelf near the product. The transfer of this obligation to electronic price displays will help to draw the consumer’s attention to this data, and make it easier for him to use it.
2. Shortcomings in the proposed law, with solutions suggested by the Consumer Council:
a. Shortcoming: Similar products are not necessarily located on the same shelf or close to one another; in this case consumers may not be able to make comparisons between similar items within the same store.
Solution: Retail chain stores will be required to place a scanner unit and screen in each aisle, to allow shoppers to check the price of an item at any time by scanning the bar code. Such technology has been in use overseas for many years.
b. Shortcoming: In the absence of price labels on the products, price comparisons between different chains will not be possible.
Solution: The retail chains will be required to publish their prices on their websites; where different branches within the chain have different prices, the prices for each of the branches will be published. The published prices will be binding on the stores. If there is a difference between the check-out price and that on the website, the law will state that the lower of the two prices will apply. This will even allow consumers to compare prices before going to the store, and thus increase competition.
c. Shortcoming: Where a sale price is posted, the use of electronic displays may make it difficult for the consumer to know the previous price for the item.
Solution: The law currently requires that, where a sale price is posted, the previous price is also to be published alongside it; the retail chains should be required to do so when indicating sale prices on the electronic displays.
d. Shortcoming: The new technology would allow the chains to change prices more frequently, given the ease of doing so at the touch of a button. It is also possible that prices may even change while the customer is in the store, so that the price posted on the shelf display when the customer selected the item will no longer be relevant.
Solution: Retail chains will be required to announce, in advance, the timing of their price updates, as well as indicating the previous price. These changes may not be made when the specific store or branch is open to the public.
If the changes suggested by the Consumer Council are inserted into the proposed law, a proper balance can be found between protecting consumer rights and the various possibilities inherent in advanced technology for making useful information available to consumers.
