Carrefour Co. Ltd.'s labeled prices did
not correspond to actual sales prices in a violation of the Fair Trade Law
Chinese Taipei
Case:
Carrefour Co. Ltd.'s labeled prices did not correspond to actual sales prices
in a violation of the Fair Trade Law
Key Words:
superstore, bar code pricing, sales promotion
Reference:
Fair Trade Commission Decision of May 19, 1999 (the 393rd Commissioners'
Meeting); Disposition (88) Kung Chu Tzu No. 115
Industry:
Volume Retailing (5314)
Relevant Laws:
Articles 21
of the Fair Trade Law
Summary:
- A consumer complained that while shopping at Carrefour Co., Ltd.'s Hsichih
branch ("Carrefour") on 24 November 1998, he selected a package
of "Manhan Sausages" marked with a promotional price of NT$89. When
he went to pay for his purchases however, the price was NT$95. Carrefour explained
that the prices did not correspond because the company's computer pricing
system could not be updated immediately to reflect promotional prices. Carrefour
offered to refund the difference or the purchase.
-
Amendments to the Fair Trade Law ("the Law") took effect on
5 February 1999. The incident in question, however, took place before the
amended articles took effect, and is governed by the law in force at the
time-i.e. the Law prior to its amendment. This is accordingly noted here
in advance. Moreover, according to Article 21(1) of the pre-amendment Law,
price checking is a major factor in consumer decisions. Consequently, if
an enterprise makes representations that lead persons to believe that by
paying a certain price that they may obtain the stated product but the true
price actually exceeds the indicated price, then there have been false or
misleading representations.
-
The Fair Trade Commission (FTC) investigated and found that the two parties
confirmed that the marked price of NT$89 and NT$95 were inconsistent. Given
that the product's price was marked on the store floor such that any consumer
might clearly apprehend it, this is a clear case of what [the Law calls]
"any other way that is communicated to the public" and should
be regulated under the Law.
-
Although Carrefour stated that the error occurred because it was unable
to change the price sign in time and that the error was caused by an computer
operating glitch, these representations were inconsistent. Regardless of
whether the prices were inconsistent because Carrefour did not change the
price sign in time or because the computer was not updated, there is little
doubt that the error occurred because of deficiencies in Carrefour's operations.
Also, the fact that the product was simply marked as having a special price
without indicating that price was only good on 22 November 1998 was sufficient
to make the consumer trust and believe that the marked price was the purchase
price.
- Carrefour also stated that it had refunded the customer's money as soon
as the error occurred and posted a notice of apology at the location for one
month. This, Carrefour stated, clearly showed that it had corrected the error
before the FTC investigated and that there was no real value in making a disposition.
However, the FTC investigated Carrefour's representation that it had immediately
refunded the customer his money, the FTC asked the consumer to verify this,
but the consumer stated that he had not received the difference and had kept
the original receipt of purchase. Moreover, if we consider the special nature
of the super store business, we find it would have been difficult for Carrefour
to make consumers fully aware of this information in a timely manner. Super
store consumers, who live in surrounding communities, usually go to super
stores on weekends or during their leisure time to buy items sufficient for
a considerable period of time. Visits to the superstore may be separated by
a considerable period of time. Further, because consumers but many products
each time they visit a super store, it is unreasonable to expect customers
to verify each purchase in the total on the receipt. Also, compared with manual
price entry in a cash register, the bar code pricing method used by Carrefour
may create a certain degree of reliance on the part of the consumer that leads
the consumer to reduce verification of his receipts. Consequently, it may
be impossible for the consumer to be aware of the difference between the purchase
price and what he believes to be the price. This affects his ability to take
measures to save himself, and he must absorb the loss himself. In this case,
a total of 93 packages of the product in question were sold between 23 and
24 November 1998. Nonetheless, Carrefour stated to the FTC that no consumers
had applied for refunds. The small notice of correction it posted on 24 November
1998 could not erase the effects of the incorrect original price. This, consequently,
is sufficient to be considered as making or using false representations as
to price.
Summarized by Lin Ch'iu-miao
Supervised by Wu Ting-hung
Appendix:
Executive Office of Carrefour Taiwan's Uniform Invoice Number: 22662550
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