An examination of pricing accuracy at retail stores that use scanners
| Date | 01 June 2004 |
| DOI | https://doi.org/10.1108/10610420410546970 |
| Pages | 269-278 |
| Published date | 01 June 2004 |
| Author | Richard Clodfelter |
| Subject Matter | Marketing |
Pricing strategy and
practice
An examination of
pricing accuracy at retail
stores that use scanners
Richard Clodfelter
The author
Richard Clodfelter is Professor in the Department of Retailing,
University of South Carolina, Columbia, South Carolina, USA.
Keywords
Pricing, Accuracy, Retailers
Abstract
This study examined the pricing accuracy at retail stores using
scanners. Reports from weights and measures inspectors in nine
states were analyzed over a four-year period. Findings are
reported on the number of pricing errors, the number and
percentage of overcharges, and the number and percentage of
undercharges. The results revealed an error rate of 3.86 percent.
Undercharges represented 2.21 percent of the total errors, while
overcharges represented 1.65 percent. In addition, the research
found that error rates declined over the four-year period. The
implications of these findings for retailers and consumers are
discussed.
Electronic access
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Since the first scanner was installed at a grocery
store in 1974, price scanning at checkouts has
received both praise and criticism. The elimination
of item pricing has netted retailers substantial
savings. For example, retailers save 1 to 2 percent
of costs in checkout productivity (Cutler and
Rowe, 1990), eliminate item pricing, and reduce
the number of employees. Additional savings also
accrue with improved efficiency in automatic
ordering, improved shelf allocation, improved
sales analysis, and better item tracking. For
customers, the implementation of scanner
technology provides faster store checkout, more
detailed receipts, and price reductions resulting
from retailers passing along cost savings.
Customers have also been promised more accurate
pricing as they go through the checkout.
Even though the use of scanner-based
checkouts has become almost universal
throughout the USA, there continues to be
complaints about customers being consistently
overcharged at the checkout by paying more than
the posted or advertised price. Since 1995, NBC
Dateline reporters have investigated pricing
accuracy at stores that use scanners and have aired
those reports annually during the Christmas
holiday season. Those reports have stressed that
pricing overcharges have occurred significantly
more often than undercharges and that retail stores
have been slow to correct pricing errors once they
have been identified by customers.
Have retailers delivered on their promise of
more accurate pricing at scanners? Academic,
government, and industry studies, as well as media
stories and news reports, have found pricing errors
at the checkout to varying degrees. Moreover,
Grewal and Compeau (1999) in a special issue of
the Journal of Public Policy & Marketing on pricing
and public policy identified scanner fraud
concerns as one of the key issues that should be a
part of a research agenda for marketers.
The major problem of comparing many of the
past reports and studies is that widely varying
methods were used to collect information. For
example, some of the studies have concentrated
solely on advertised or sale items, while others have
sampled prices across a store’s entire inventory.
Some studies have concentrated on one city or
county, while others have used a national sample.
In addition, many of the studies have dealt with
pricing accuracy only in one specific retail
category, such as grocery stores. Additionally,
several market researchers (Mazis, 1997; Kinnear,
1997) also raise the concern that too often such
public policy studies have been only “one shot”
investigations that lack the necessary follow-up.
They believe that the results observed in the first
Journal of Product & Brand Management
Volume 13 · Number 4 · 2004 · pp.269-278
qEmerald Group Publishing Limited · ISSN 1061-0421
DOI 10.1108/10610420410546970
269
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