Walmart has been installing digital price tags in thousands of stores. Other retailers like Kroger have introduced them as well. But they’d all have to get rid of their digital price displays and go back to printed paper price tags, under new proposed legislation that’s just been introduced in Congress.
Democratic Congresswoman Rashida Tlaib of Michigan has introduced what she calls the “Stop Price Gouging in Grocery Stores Act,” to prohibit “personalized price gouging,” where stores allegedly “use consumers’ sensitive personal information against them to raise prices.”
And those electronic shelf tags are part of the problem, she says. So she wants to make them illegal.
“Companies should not be allowed to use electronic labeling or your personal information to charge you a higher price,” Tlaib said in announcing her bill. “We need to ban corporate price gouging and surveillance pricing.” And one of the ways her bill proposes to do so is by “requiring stores to use a non-digital presentation of the price of each item.”
Her proposed legislation, co-sponsored by more than two dozen of her Congressional colleagues, is the latest to address the issue of so-called “surveillance pricing,” though most have been introduced at the state level, and this could be the first measure to be implemented nationally.
Like some of the other proposals, this latest effort seeks to ban several things that retailers insist aren’t happening.
“Electronic shelf labels in grocery stores, and cameras with facial recognition technology, allow companies to charge different people different prices for the same item. This is called surveillance pricing,” Tlaib wrote in an editorial coinciding with her bill’s introduction.
So her proposal would ban any grocery retailer from “adjusting the price of any item… based on the personal information of the consumer,” except in the case of loyalty program offers or promotions like senior or military discounts. It would also require retailers to prominently disclose if they are using facial recognition technology.
The proposed regulations are similar to those in the “Stop AI Price Gouging and Wage Fixing Act,” which Tlaib co-sponsored last month. But her own bill goes much further. To make certain that the price you see at the shelf is the price that everyone will pay, Tlaib’s bill would ban electronic shelf labels altogether in most grocery stores.
That “throwing the baby out with the bathwater” approach may be overkill, according to a recent academic study. In their report “Electronic shelf labels have not led to surge pricing in US grocery retail, despite regulator concerns,” researchers studied five years’ worth of prices before and after a grocery chain introduced digital shelf tags, and found little difference in before-and-after prices. Replacing paper price tags with electronic shelf labels, they concluded, “is far more likely to bring efficiency and consumer benefits than the dystopian scenarios some fear.”
Retailers are likely to believe that banning something they say they aren’t doing may be overkill as well. Walmart and Kroger have publicly pledged that they have no intention of using digital price tags to implement surge pricing or to display different prices to different shoppers based on their personal characteristics.
The United Food and Commercial Workers International Union, which represents more than 800,000 grocery employees, endorsed Tlaib’s measure, with a slight hedge. While Tlaib suggested nefarious pricing tricks were already happening, the UFCW cautioned that it only might happen someday. “Technologies like electronic shelf tags threaten to usher in a new era where the price of an item you pick up from the shelf can change within the amount of time it takes to walk to the register. Even more concerning, customers could be charged different prices based on personal data like income, race, gender, and more,” UFCW President Milton Jones said in a statement.
Peter V.S. Bond, co-host of the “CPG Guys” podcast, tried to seek out a middle ground. In a LinkedIn post, he wrote that “the concerns about dynamic surge pricing remain valid guardrails,” but urged that “policy discussions should be guided not by fear of what might happen but by real-world data showing what is happening.” And the evidence so far, he concluded, shows we’re simply “not seeing surge pricing in the grocery aisle” right now.
Whether you see this latest bill as a wise precaution, or a misguided overreach, could depend on whom you trust more – retailers who claim they’re on your side and are using new technology to lower your grocery bill, or politicians who try to earn headlines and popular support by taking on price-gouging bogeymen.
If digital price tags do end up becoming illegal across the country, keep an eye on your grocery bill to find out which one was right.
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SOURCE: Walmart And Kroger’s Prices Would Be Illegal Under Proposed New Law