The use of shelf-edge pricing and promotional tickets is one of the most fundamental aspects of running bricks and mortar retail. Creating and displaying shelf edge tickets may seem like an easy process, but there are some pitfalls retailers can easily fall into if not well informed of the ACCC’s regulations on displaying pricing. Mistakes have the potential to cause damage to brands and businesses, as well as trouble with the ACCC.
ACCC Guidelines
The ACCC has strict guidelines on how shelf labels and promotional tickets are to be displayed. Retailers must present correct prices, clearly, without misleading consumers by trying to make savings appear artificially higher. Speaking broadly, there are a number of rules around the use of promotional pricing that could easily catch out stores unless diligent. Length of time goods have been sold at a particular price point, the number of units sold at that price and whether or not a sale price represents an actual saving are all factors that need to be taken into consideration. A small number of goods cannot be sold at a higher price immediately prior to a sale, to falsely advertise to customers a higher ‘Was’ price and a larger saving.
When it comes to catalogue offers specifically, retailers must conform to the ACCC’s rules around displaying multiple pricing. Essentially, catalogue specials (unless expired or outside a specified geographical location) must match the price shown on shelf-edge promotional tickets. If there is any discrepancy between these prices, the goods must be sold for the lowest advertised price or alternatively, the goods must be removed from sale until the price has been fixed. Either of these instances involves confusion and inconvenience for both the shopper and the retailers. This is an especially regrettable situation when the main objective for a retailer is to provide a positive customer experience and to nurture brand loyalty. Even if a store has all the correct knowledge, when the ticketing process is lacking efficiency and transparency, mistakes can still be made.*
Violations of ACCC regulations
Predictably, failure to comply with ACCC regulations can have serious consequences for businesses. As stated above, when customers are faced with incorrect pricing in-store, it leads to dissatisfaction in various degrees. In the best-case scenario, shoppers will simply ask a sales assistant for clarification and continue on with no lasting harm done. However, if inconsistencies between pricing in catalogues and the shelf edge become a common occurrence it can quickly erode consumer trust in a brand. Shoppers become frustrated that pricing on the shelf edge is continually wrong, they start to doubt that advertised promotions will actually be available in-store and they could begin to feel deceived by the brand. Customer loyalty is the backbone of retail, hard-earned and easily lost when correct pricing can’t be counted on.
In addition to the strain on brand loyalty, fines and penalties handed down from the ACCC for policy breaches present a real monetary loss for businesses. Let’s look at a real-life example of a brand that has incurred an ACCC penalty. In 2011, the ACCC took the Jewellery group Zamels to Federal Court for misrepresenting savings on 44 items in their May 2010 catalogue. In 2013 the Federal Court ruled that Zamels had used misleading ‘Was’ ‘Now’ price promotions in their catalogues. In advertising promotions such as “$99 $49.50” or “WAS $275 NOW $149”, Zamels indicated to customers that they would save the difference between the higher and lower prices, which turned out to be incorrect information. As it happened, Zamels had either never sold the 44 items for the higher ‘Was’ price, or had sold very limited quantities at the higher price immediately before the sale began. As a result and as a clear message to other retailers, the Judge imposed a $250,000 fine on the Jewellers.**
How stores can stay compliant
By streamlining the in-store ticketing process, support offices can ensure that all stores comply with regulations. Utilising software to control the distribution of shelf edge and promotional tickets is the best way to prevent mistakes at a store level. Ticketing software allows support offices to create ticket batches for catalogue specials and assign them to their store networks, with the associated print by date, tightly controlling what gets displayed at the shelf edge. All stores have access to the same, correct, promotional tickets that can be printed directly in stores and added to the shelf edge immediately. In addition, support offices will be able to report on which stores have printed off their catalogue specials and which haven’t, adding another layer of security to ensure compliance.
A common practice for support office controlled store networks is to centrally print all promotional ticket batches and mail them out to stores. This process is grossly inefficient and is prone to creating errors at the shelf edge. The most notable drawback when it comes to using this method is that there is almost zero flexibility. Last minute changes are almost impossible. Once the tickets have been printed, that’s it, there’s no going back. Any pricing errors that are in the ticket batch are there to stay. Ticket batches can be reprinted, assuming there is time to do so, but this creates unnecessary waste and is an unforeseen cost. Reprinting ticket batches also assumes that support office catches the mistake in the first place, with time to spare. A further issue with central printing is that support office has no way to tell whether stores have hung the tickets, or if they’re still sitting in the back office in a box, waiting to be unpacked. Even when price files are sent directly to stores, errors still take time to correct, if noticed at all, and support offices have no way of knowing if stores have printed off their ticket batches.
Using a ticketing system at support office level ensures compliance across store networks. Data can be uploaded directly from the POS via spreadsheet, meaning that pricing is correct, every time. Once ticket batches are created, they can be distributed to an entire group of stores within seconds. Any changes that need to be made can be made immediately and those changes can then be communicated through the software to all stores. Using reporting features, support offices can have full visibility over which stores have printed and what they have printed, for an extra layer of protection from running afoul of the ACCC. Flexibility and visibility are are what it’s all about when it comes to store compliance, both of which are the main advantages of using a ticketing platform.
* All information from https://www.accc.gov.au/business/pricing-surcharging/displaying-prices
and https://www.accc.gov.au/media-release/accc-takes-court-action-over-zamels-catalogue-claims