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> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, St
by cs702 10mo ago
> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, Stouffer’s frozen meatloaf, Sprite and Pepsi, ibuprofen, Klondike Minis – shoppers were overpaying for all of them. Pedigree puppy food, listed at $12.25, rang up at $14.75.
Surely, now that this made the news, there will be an investigation into the fraudulent behavior of Dollar General and Family Dollar.
Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)
- nrhrjrjrjtntbt 10mo agoIt was investigated. They got fined $5k. 4 times. Is there another law that can get them for repeat abuse.
- limagnolia 10mo agoTheir attorney general could also sue them, as was done in several states mentioned- resulting in much larger settlements. Only the fines by the dept of weights and measures are limited.
- jeltz 10mo agoIt was investigated, the issue is that the fines are smaller than the profit. I would personally want to see things like this considered fraud and that it can result in prison sentences for executives and other people invovled in the decision making.
- dawnerd 10mo agoYa the problem needs to be a fine the first time, second time it’s fraud. Allow for honest mistakes. Punish for clearly defrauding customers. We really need jail time for execs making these decisions but that rarely happens.
- teeray 10mo agoCorporate fines should all be percentages of profits.
- estearum 10mo agoPretty trivial to make profits "not exist" though if you planned to engage in fraud and wanted to de-risk it.
- esseph 10mo agoThey're a publicly traded company. If they drop profits substantially, I imagine shareholders etc would leave.
- estearum 10mo agoI'm pretty sure GP was suggesting a general enforcement framework, not talking about any particular company. Anyway no, shareholders care about much more than simple profits.
- esseph 10mo agoExplain, please. I ask because I've never invested in a company that wasn't very profitable. I'm trying to find out besides intense insider information why someone would. (I'm not VC clearly, just a retail investor.)
- estearum 10mo agoExplain how people care about more than just profitability? If they didn't, everyone would be invested in the single most profitable company on the market, which they're not. There are unprofitable companies people are perfectly willing to buy. Growth, absolute revenue, rates of rates of change are all relevant depending on what you care about.
- bruce511 10mo ago
- rtp4me 10mo agoYou want prison sentences for execs if you were charged $1.50 for a can of corn instead of $1.45? Surely you can't be serious.
- hedora 10mo agoIf there’s a paper trail showing they authorized it, and the total amount of fraud is enough for felony charges (a few thousand bucks, I think), then yeah, throw their asses in prison, and make them refund the money they had the business steal out of their personal funds. I’m all for limited liability corporations, but if there is a smoking gun that shows you intentionally engaged in criminal activity, that should pierce the liability shield.
- rtp4me 10mo agoDo you honestly believe a senior exec at a company specifically said to charge the customer more than what the price on the shelf says? Chances are, in the world of computers and automation, mis-pricing just happens. Its a chance we all take as consumers. You just have to be mindful when shopping.
- fzeroracer 10mo agoI don't know about you, but shopping at major grocery stores I have rarely been mischarged and I check my receipts/final price pretty religiously. If Dollar Tree consistently overcharges people then there should be an investigation, discovery and jail time if they willingly enable fraud. And given that this entire thread is about how they frequently overcharge people I think it matters.
- Tadpole9181 10mo agoWhy, yes, I actually do. Just like BMW execs specifically instructed engineers to cheat at emissions testing. And last time I checked, you don't get to just say "oopsie woopsies, I only accidentally committed fraud of a mass scale exclusively in a way that benefits me for a prolonged period of time that would obviously show up on books and intentionally hid it until caught" and get out of punishment. If I break the law, I get arrested. Or am I allowed to "accidentally" try to carry out a new PC from Best Buy several times in a row?
- pjc50 10mo agoThis is very American: it's illegal, but everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process. There's no political consumer complaints culture, it's seen as an individual matter. You couldn't get away with this for as long in the UK as a retailer. Either the CMA or Trading Standards would deal with it.
- JumpCrisscross 10mo ago> everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process Nobody agrees on that. TFA follows "a state government inspector" whose effectiveness is hampered solely by a "North Carolina law" which "caps penalties at $5,000 per inspection." That law [1] doesn't exist outside North Carolina. This is the first time I'm reading about this. We have a dollar store in my town. I'm curious to replicate this experiment myself and send the results into the local newspaper if the discrepancy is real. [1] https://www.ncleg.gov/enactedlegislation/statutes/html/bychapter/chapter_81a.html#:~:text=%C2%A7%2081A-30.1%5C.,s.%204%28a%29.%29 https://www.ncleg.gov/enactedlegislation/statutes/html/bycha... § 81A-30.1
- cogman10 10mo ago> this kind of thing doesn't get solved by the regular political process. Yeah it does. This is specifically the sort of thing that the FTC is in charge of addressing. That is ultimately controlled by who the president is. There is some funding problems with these enforcement agencies that forces them to pick and chose their battles. However, you'd be naive to think that there isn't a significant difference from how Lina Khan ran things and how Andrew Ferguson runs things.
- antonymoose 10mo agoKeep in mind, this is also a state thing. I live on the NC/SC/GA border so I view news for all three daily. I routinely see this type of crime heavily policed and reported on in NC. Whereas my entire life is in coastal SC and never once in my life saw this repeated on or enforced.
- wkat4242 10mo ago> Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.) They could of course show the actual prices instead of tricking customers? If the margins are so low nobody else will be significantly cheaper anyway.
- ssl-3 10mo agoSome people say it's trickery, but when I apply the razor I find pricing errors more likely to be the result of stupidity than of malice. Having worked in retail myself, I understand that some days there just isn't time to get it all done. A debt of unfinished tasks can accumulate. It happens. Sometimes old prices get left up. (I think the stupidity is on the part of management more than it is the employees, but it's still more stupid than it is malicious.) --- Dollar General got into the thick of it with the Ohio Attorney General a couple of years ago[1] over this issue: The prices on the shelf didn't always match the prices at the register. Stores were closed[2] while they updated their price tags to match reality. And as part of the settlement with the Ohio AG: Nowadays, when I go into a Dollar General and Red Baron pizzas are on the shelf for $5 and they ring up at $7.65, they're required to honor the posted price of $5 when I bring this up to them. (That last bit really should be enshrined in law instead of the footnotes of a legal settlement with a single entity, but alas: It just isn't that way in Ohio.) [1]: https://www.ohioattorneygeneral.gov/Media/Newsletters/Consumer-Advocate/February-2024/Dollar-General-settlement-brings-help-to-Ohioans https://www.ohioattorneygeneral.gov/Media/Newsletters/Consum... [2]: https://www.supermarketnews.com/foodservice-retail/ohio-ag-dollar-general-temporarily-closes-stores-to-fix-pricing-issues https://www.supermarketnews.com/foodservice-retail/ohio-ag-d...
- nerdponx 10mo agoHanlon's Razor is not relevant with large amounts of money at stake. in fact the complete opposite is the best approach: The more money that's involved, the more you should suspect malice until it has been conclusively ruled out.
- shepherdjerred 10mo agoAs a company seeking to maximize profit, why would you fix this problem? It seems optimal to say "it's out of our control" -- you get to overcharge customers, and you have a reasonable explanation if a lawsuit comes. I would be curious to see how often it's the other way around, e.g. they undercharge a customer.
- ssl-3 10mo ago
- tzs 10mo ago>> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. The crazy thing is that even if it did ring up at the correct price it isn't a good deal. It's around $4.80-4.90 at Walmart and Target and others.
- delfinom 10mo agoIt's worse than that. In many cases the dollar stores now get skus of items made for them that are "cheaper" than a sku in Walmart but for a more expensive unit price than Walmart as they shrink the product.
- limagnolia 10mo agoPaying 10 to 20 cents more for an item can still be a better deal than traveling further away to a larger store. The mis-pricing is completely unacceptable, though.
- ryan_lane 10mo agoBut because these stores exist, they lead to grocery stores no longer existing, because they eat the majority of the profit from grocery stores. This forces people to shop at the dollar stores because it's the only thing nearby. The dollar store model increases prices, reduces consumer choice, and makes us less healthy.
- energy123 10mo agoDo they make higher margins?
- ryan_lane 10mo agoOn particular items, yes. As a whole, no. They have a lot of loss leaders, then rely on being generally overpriced to make that up. Grocery stores also rely on this, but at a larger scale, and when their higher margins dry up, they go out of business. Dollar stores target grocery stores margin products, to drive them out of business.
- deepbreath1 10mo agoI am a POS system developer. Such errors can occur in the systems I develop, but they are unintentional—often caused by price data synchronization issues. I am actively working to resolve them.
- veunes 10mo agoIf a business model only works as long as customers don't notice the real price, then the model itself is fundamentally broken