Canadian retailers that standardize their displays of unit pricing and eliminate misleading price presentations stand to gain a competitive advantage by developing greater customer loyalty, new research by Consumers Council of Canada found.
The Council based this conclusion, found in its just-released report Unit Pricing: Time for a National Approach?, on a 2,000-person national web survey and focus groups conducted by Environics Research and on a review of academic literature and interviews with experts.
“Confusing and inaccurate price presentations send a clear signal to consumers that a business cannot be trusted – that they should be on-guard,” said Council President Don Mercer. “It should be obvious to retailers that sloppy, inconsistent and misleading price presentations are bad for business and undermine consumer confidence. But old, bad habits are still dying hard.”
While the main focus of the research was not to research the scope of pricing misrepresentation or inaccuracy or catch out Canadian retailers, the Council’s research easily identified that shelf- and online-pricing presentations abound in the Canadian marketplace even among major retailers, with or without provincial law in place defining retailers’ responsibilities.
Inconsistent unit pricing which may mislead consumers also appears on the website of Canadian online retailers, which presumably use computer-driven algorithms to produce these outcomes.
“Many Canadian retailers are voluntarily offering their customers unit pricing information at point of purchase – this is good – but they aren’t doing a very consistent, helpful job of it and they appear to ignore well-thought-out, existing standards for doing so,” said Mercer.
The Council’s report recommends:
- Provincial-federal governments collaborate with retailers to explore methods of delivering unit pricing information to Canadian consumers.
- Provincial consumer ministries consider directly regulating price presentations, as Province of Quebec does now.
- Competition Bureau of Canada could provide leadership for a multi-stakeholder approach to encouraging accurate and effective unit price labelling.
- Measurement Canada, which has jurisdiction over accurate price representations concerning quantity of product, could enter into agreements with other government ministries to monitor unit price shelf-labelling and price accuracy as observed on-shelf and at purchase.
- Because retailers stand to gain from improved consumer loyalty and confidence, they could develop competitive advantage by adopting standards-based pricing displays and educating their customers about how to use the service.
- Educators of all kinds that teach consumers about household budgeting should focus on the best ways to make price comparisons and highlight common ways unethical retailers manipulate price presentations to make more money from them.
Consumers Council of Canada has received funding from Innovation, Science and Economic Development Canada’s Contributions Program for Non-profit Consumer and Voluntary Organizations. The views expressed in this report are not necessarily those of Innovation, Science and Economic Development Canada or the Government of Canada.
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