Arizona Department of Weights and Measures CORPORATE EDUCATION 99-Cent Stores 99-Cent Stores.

Arizona Department of Weights and Measures

CORPORATE EDUCATION

99-Cent Stores99-Cent Stores


These photos were taken at some 99-cent stores in the Phoenix

Metro Area.

It doesn’t matter which ones we visited.

We’ve seen these problems at many different 99-Cent Stores.


Three of your stores recently failed our inspections because of significant violations of Arizona pricing laws. Because of those violations, 99-Cent Discount Stores faces a number of civil penalties.


Remember: Civil penalties may be assessed when a stores fails an inspection, though we typically do not impose penalties on the first violations.

Civil penalties WILL be imposed if further re-inspections find violations. If they STILL aren’t corrected the size of those penalties will escalate every time we find violations.


We’re going to show you some photos of problems we found. None of these pictures were staged in any way. Later on, we’ll also take some of your top managers on a walking tour of a store to point out the types of problems we see.


Keep in mind that these Keep in mind that these inspections were inspections were triggered by complaints triggered by complaints from your customers.from your customers.

When your customers complain, they become our customers – and we follow up on every customer complaint we receive.


We hope that today’s presentation will help you improve compliance at all 99-Cent Discount stores.

Our goal is to help you comply with the law, not to collect fines.


What happens when we What happens when we conduct an inspection.conduct an inspection.


Getting StartedFirst, the Investigator presents his or her First, the Investigator presents his or her

documents and goes over the Regulatory Bill of documents and goes over the Regulatory Bill of Rights.Rights.


This describes the inspection process. The This describes the inspection process. The on-site representative will be asked to on-site representative will be asked to

sign this form to indicate everything was sign this form to indicate everything was explained, and they understand what will explained, and they understand what will

happen.happen.


Then we conduct the Then we conduct the inspection. Two inspection. Two inspections - Price inspections - Price Posting and UPC - are Posting and UPC - are done together…done together…


Price Posting


Price Posting: AAC R20-2-302(D)A retail seller who offers, exposes, or advertises a commodity for sale or rent shall post a definite, plain, and conspicuous price on the commodity or adjacent to where the commodity is displayed. If the price of the commodity is by weight, measure, or count, the retailer shall place the price per weight, measure, or count on the commodity or adjacent to where the commodity is displayed. If a retailer offers a commodity for sale or rent at a price reduced by a percentage or a fixedamount from a previously offered price, the retailer shall place the reduction or reduced price on the commodity or adjacent to where the commodity is displayed.


Price Posting: ARS 41-2081(F)4

Except as otherwise provided in this chapter or by rules adopted pursuant to this chapter, any package kept for the purpose of sale or offered or exposed for sale shall bear on the outside of the package a definite, plain and conspicuous declaration of:The price, except as provided in subsections K and L.


Price Posting: ARS 41-2081(K) & (L)

K. Instead of each package bearing the price as required under subsection F, paragraph 4, the seller may post the price of the package in bold type that measures no less than three-eighths of an inch on the shelf or display at the point of display of the product. If the price on the shelf or display is less than eighteen inches from floor level, the price shall be angled upward from vertical at least fifteen degrees.

L. If the package is offered for sale at a price reduced by a percentage or a fixed amount from a previously offered price, the reduction shall be displayed at the point of display of the package in the manner required by this section.


Price Posting Violations:

How Much Is This?


The first thing we do is go around your The first thing we do is go around your store and select 250 items at random to store and select 250 items at random to see if they are properly priced.see if they are properly priced.

We’ve been finding a lot of pricing errors at 99-Cent Discount Stores.


Let’s start with these shelves.Let’s start with these shelves.

These gift-wrap items appear to be 79.99 centsBut how much are the Del Rey napkins?


Since there’s no other price point…

We have to assume they’re ALSO 79.99 cents each.


‘‘Top 10 Pricing Tips’:Top 10 Pricing Tips’:

The following can be found in the Arizona Administrative Code (AAC) R20-2-402 (D):

“A price posted above the highest item in a vertical location is the price of all items in that location.”


Finding the right price CANNOT Finding the right price CANNOT BE a multiple-choice test.BE a multiple-choice test.


Here are some candles being offered for saleHere are some candles being offered for sale

Are they 99.99 cents?

Or are they TWO for 99.99 cents?


A.R.S. § 41-2081 (C)A.R.S. § 41-2081 (C)

“A person shall not misrepresent the price of any commodity or service sold or offered … or represent the price in any manner calculated or tending to mislead or in any way deceive a person.”


So in this case, the lowest price will apply


Here’s another multiple-choice Here’s another multiple-choice price.price.

Is this pasta 59 cents a bag…

Or is it 29.99 cents?


Are the Skittles Are the Skittles 49.99 cents?49.99 cents?

Or are they 99.99 cents?


Are these glasses 99.99 cents each?Are these glasses 99.99 cents each?

Or are they TWO for 99.99 Or are they TWO for 99.99 cents?cents?


Is this glass plate 2 for 99.99 cents…Is this glass plate 2 for 99.99 cents…

Or $1 each?


By now you should be By now you should be seeing a pattern:seeing a pattern:

We keep seeing the same problems

Over and overAt all your stores!


99-cent Only Stores should 99-cent Only Stores should follow the “left-to-right” rule…follow the “left-to-right” rule…

“Consistency is the key to sign placement. Many retailers use the left to right method for pricing products. When pricing items on a shelf that are priced the same, place the first price sign under the far left most product on the shelf. When a product has a different price make a new sign and place the sign under it. If the product continues for more than three feet, repeat the sign so that your customers don't become confused. It's that easy.”

‘Top 10 Pricing tips, page 7:


D. The following are not price-posting violations:

1. A price is posted on a shelf where an item is displayedrather than marked on the item individually.

2. A price is posted on the shelf at the farthest left side of allitems with the same price for up to 3 feet of shelf space.The price for commodities with the same uniform pricecode may be more than three feet from the price posted ifthey are all displayed in the same location.

3. A price posted above the highest item in a vertical locationis the price of all items in that location.

R20-2-402. Price-posting Inspection Procedure and Violation Exceptions

Here are some more pricing tips


Price Verification


A person shall not misrepresent the price of any commodity or service sold or offered, exposed or advertised for sale by weight, measure or count or represent the price in any manner calculated or tending to mislead or in any way deceive a person.

Price Verification: ARS 41-2081(C)


The Price Charged At The Register

Has to be the price marked on the shelf.


At ‘Store A’ we “purchased” a case of six one-gallon bottles of

water.There was ONE price-point on the case: 99.99 cents.

We were charged $6 for the case.

That was a $5 OVERCHARGE.


(This example was from (This example was from one of your one of your competitors, but it’s competitors, but it’s similar to what we saw similar to what we saw at your store).at your store).

99.99 cents


We picked up a mirror that was priced at 59 We picked up a mirror that was priced at 59 cents.cents.

But when we went to pay for it, we were charged 99.99…

That was a 40-cent OVERCHARGE


We also picked up some furniture We also picked up some furniture wipes…wipes…

The shelf price was 69.99 cents.We were charged 99.99

cents.That was a 30-cent OVERCHARGE


At ‘Store B,’ At ‘Store B,’ we tried to we tried to buy them for buy them for the marked the marked price of two price of two for 99 cents.for 99 cents.

Remember the glasses?

But they charged us 99.99 cents each…For a $1 overcharge.


And we picked up scouring powder.And we picked up scouring powder.

It was marked at 59.99 cents each.It was marked at 59.99 cents each.

We were charged 99.99 cents….

…for a 40-cent OVERCHARGE.


And so it went at three of your And so it went at three of your stores that we recently inspected.stores that we recently inspected.

There were problems in the prices on the shelf….

…and we were charged the wrong price far too often.


But as they say in those late-night But as they say in those late-night infomercials…infomercials…

WAIT!

THERE’S MORE!


If a customer says "Hey, that's

not the price on the shelf!"

what do you do?What is the 99-cents only price-error policy??


None of your None of your stores had one.stores had one.


This is another

significant violation


Pricing Error Policy: ARS 41-2081(M)2

On the request of a consumer, a retail seller shall provide a written statement of the retail seller's policies regarding errors in pricing.


4. The Department shall issue a warning to a person who

does not have a written price-error policy. The Department

shall impose a $500 civil penalty if the person does

not have a written price-error policy upon reinspection.

R20-2-104. Administrative Enforcement ActionI. Price verification.


Here are the Inspection Scores Here are the Inspection Scores for the three stores we checked:for the three stores we checked:


Store A:Store A:

Price Posting:

UPC Scanning:

88 percent.

Fail92 percent.

Fail4 OVERCHARGES

30 PRICING ERRORS

No price-error policy

Fail:

ESTIMATED -* CIVIL PENALTIES:

$300 T0 $1,200


Store B:Store B:

Price Posting:

UPC Scanning:

96.4 percent.

Fail96 percent.

Fail2 OVERCHARGES

9 PRICING ERRORS


Fail$600 to $1,100



Store C:Store C:

Price Posting:

89.6 percent.

Fail26 PRICING ERRORS


Fail$2,600

to $3,000


Unpaid civil penalties: $950,

more than one year overdue!


We found far too many violations during our

inspections.


As a result,As a result,THESE STORES MAY FACE CIVIL THESE STORES MAY FACE CIVIL

PENALTIES TOTALING…PENALTIES TOTALING…

$3,500 TO $5,300!$3,500 TO $5,300!


And remember: And remember:

We WILL be We WILL be reinspecting these reinspecting these

stores!stores!


I. Price verification.

1. The initial inspection of a retail location for price verification is for educational purposes and an enforcement action will not be imposed for a violation identified during the initial inspection.

2. The Department shall issue a stop-sale, stop-use tag to a person who fails a price verification reinspection if the violation cannot be corrected within 30 minutes of the Department completing the reinspection.

a. The Department shall impose a $100 civil penalty per violation on a person who fails a reinspection if the Department finds more than one item at more than its posted price.

b. The Department shall impose a $200 civil penalty per violation on a person who fails a second reinspection. The Department shall increase the per violation civil penalty imposed by $100 for each subsequent reinspection until the violation is corrected.

R20-2-104. Administrative Enforcement Action


J. J. Price posting.Price posting.

1. The initial inspection of a retail location for price posting is for 1. The initial inspection of a retail location for price posting is for educational purposes and an enforcement action will not be educational purposes and an enforcement action will not be imposed for a violation identified during the initial inspection.imposed for a violation identified during the initial inspection.

2. The Department shall issue a stop-sale, stop-use tag to a 2. The Department shall issue a stop-sale, stop-use tag to a person who fails a price posting reinspection if the violation person who fails a price posting reinspection if the violation cannot be corrected within 30 minutes of the Department cannot be corrected within 30 minutes of the Department completing the reinspection.completing the reinspection.

3. The Department shall impose a $50 civil penalty for each 3. The Department shall impose a $50 civil penalty for each inspected lot not priced if a person fails a reinspection with a inspected lot not priced if a person fails a reinspection with a score of less than 96 percent.score of less than 96 percent.

4. The Department shall impose a $100 civil penalty for each 4. The Department shall impose a $100 civil penalty for each inspected lot not priced if a person fails a second reinspection.inspected lot not priced if a person fails a second reinspection.

5. If the Department receives and substantiates a complaint 5. If the Department receives and substantiates a complaint about a person against whom the Department took an about a person against whom the Department took an administrative enforcement action under subsection (J)(2) administrative enforcement action under subsection (J)(2) within the 60 days before the date of the complaint, the within the 60 days before the date of the complaint, the Department shall issue a stop-sale, stop-use tag and impose a Department shall issue a stop-sale, stop-use tag and impose a civil penalty that is $100 more than the civil penalty that the civil penalty that is $100 more than the civil penalty that the Department previously imposed against this person.Department previously imposed against this person.

R20-2-104. Administrative Enforcement Action


4. The Department shall issue a warning to a person who

does not have a written price-error policy. The Department

shall impose a $500 civil penalty if the person does

not have a written price-error policy upon reinspection.

R20-2-104. Administrative Enforcement ActionI. Price verification.


IT’S NOT JUST THE LAW,

IT’S GOOD CUSTOMER SERVICE!

BUT REMEMBER:

Our goal is to help you comply,

not to collect civil penalties


Questions?

Arizona Department of Weights and Measures CORPORATE EDUCATION 99-Cent Stores 99-Cent Stores.

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