POINT OF SALE DISPLAY REQUIREMENTS

By:  Norm Plotkin, CAWA Legislative Advocate
       norm@plotkingovrelations.com
       916-446-5900

At the CAWA Board of Directors meeting recently questions arose over what were identified as ostensibly new requirements surrounding point of sale display to consumers. At the request of Board Members we conducted an analysis of the legislative history and current state of the law.

What we found is that point of sale display requirements have been in statute since 2002, but with an effective date of January 1, 2007 . In other words, retail sellers were given five years to figure out how to comply with this requirement. This year, the California Retailers Association (CRA), a trade organization which represents a broad base of retail companies, including supermarkets, chain drug stores and general merchandise retailers, sponsored legislation to eliminate ambiguity and clarify exactly what must be displayed . 

While the bill does not change the fact that purchase information must be displayed to the customer beginning 1/1/07, it makes a number of other related changes to the statute. Specifically, the bill:  

Revises and recasts the requirement that all price reductions, surcharges, taxes, and the total amount for each transaction be displayed for the consumer at least once before the consumer is required to pay for the goods or services; clarifies that, in cases of price reductions, the automatic checkout system is not required to display the amount of every discount, but must display either the discounted price for the item or the original price and the discount.

Requires that surcharges and the total value to be charged for the overall transaction be displayed for the consumer at least once before the consumer pays. This bill does not specifically require that taxes be displayed. Clarifies that "automatic checkout system" and "point-of sale systems" are the same system. Repeals the term "automatic checkout" and replaces it with the term "point-of-sale," which is "a computer or any electronic system used to interpret the universal bar code or any other code that is on an item offered for sale to determine the price of the item being purchased regardless of whether the code is entered manually or automatically by a machine."

CAWA members need to review these changes and determine if it is a system that they can live with or if it will pose significant problems not anticipated by other sellers. If significant problems are anticipated, we must then document these and build a case for change, addressing the issues identified by CAWA.

Legislative Activity and Legal Requirements Prior to 2006
The authority for weights and measures registration fees was passed by the Legislature in 1982 to provide funding for weights and measures inspection activities. The law has been amended several times to add additional devices to the registration program and to adjust the schedule of maximum fees. Pricing display accuracy has been enforced by the state since the Rosenthal-Roberti Item Pricing Act of 1981. 

In 2005, AB 889 (Ruskin) Chapter 529, Statutes of 2005, established criteria and methodologies, as well as extended the authority of county sealers to inspect the pricing and accuracy of retail point-of-sale systems, which remains in effect until January 1, 2009. 

Point of Sale display requirements are found in statute at §13300 of the Business and Professions Code. The specific requirement in current law is:

13300. (a) The operator of a business establishment that uses an automatic checkout system to sell goods or services to consumers shall ensure that the price of each good or service to be paid by the consumer is conspicuously displayed to the consumer at the time that the price is interpreted by the system. All price reductions, surcharges, taxes, and the total amount for each transaction also shall be displayed for the consumer at least once before the consumer is required to pay for the goods or services. The checkout system customer indicator shall be so positioned, and the prices and amounts displayed shall be of a size and form, as to be easily viewable from a typical and reasonable customer position at each checkout location.

(b) For the purposes of this section, "automatic checkout system" means a computer or any electronic system used to interpret the universal bar code or any other code that is on an item offered for sale to determine the price of the item being purchased regardless of whether the code entry is accomplished manually by a human or automatically by a machine.

(c) All automatic checkout systems used by a business establishment on and after January 1, 2007, shall comply with the requirement of subdivision (a).

Assembly Bill 2732 (Washington), Chapter 818, Statutes of 2002, first established the requirement that a business that uses an automatic checkout system ensure that the price of the good or service registered by the computer is conspicuously displayed to the consumer, along with any price reductions, taxes, surcharges and the total amount of the transaction.,. The act added Chapter 13 to Division 5 of the Business and Professions Code, titled "Automatic Checkout Systems" and established an elaborate mechanism for enforcement by counties, cities and aggrieved persons, as well as an appeals process. 

Additionally, while AB 2732 provided for the noted enforcement mechanism, it should also be noted that the bill included uncodified intent language clarifying that the enforcement was not to be frivolous:

It is the intent of the Legislature that the state laws that protect consumers be adequately enforced to ensure fair business practices. It is also the intent of the Legislature to ensure that business owners are not unfairly harassed by litigation that is without merit. The Legislature finds and declares that the provisions of law relating to frivolous actions apply to actions filed under this act.

Prior to the passage of AB 2732, the law generally required grocery stores that use automatic checkout systems to mark a clearly readable price on at least 85 percent of their packaged consumer commodities offered for sale, with certain specified exceptions. Violators are subject to liability for actual damages plus fifty dollars ($50). [Civil Code Sec. 7100 et seq.]
Previous law also provided that it is unlawful to make false or misleading statements concerning reasons for, existence of, or amounts of price reductions. Violators are subject to liability for actual damages as well as equitable relief. [Civil Code Sec. 1770(a)(13).]

Finally, previous law established in each county a county sealer who regulates weighing and measuring devices and enforces various laws regarding weights and measures. [Business and Professions Code Sec. 12000 et seq.] Penalties that may be sought by the sealers include civil penalties of up to $1,000, misdemeanor criminal penalties, injunctive relief, and enforcement cost. [Business and Professions Code Sec. 12015.3, 12015.5, and 12026.]
AB 2732 was sponsored by the County of Los Angeles. According to the Senate Judiciary Committee Analysis, inspections conducted by the county Department of Consumer Affairs found that approximately one-third of retail stores overcharged for sale-priced items that were registered on automatic checkout scanners. This bill was intended to protect consumers from such overcharging by ensuring that prices and other relevant information are conspicuously displayed to consumers prior to payment.

Legislative Activity in 2006
The provisions of the Automatic Checkout System Chapter were slated to take full effect on January 1, 2007 pursuant to §13300(c) of the Business and Professions Code. Faced with this full implementation date, the California Retailers' Association, sponsored legislation to "clarify vague statutory language" and require that a customer see the actual price charged for a good or service. 

According to the Business and Professions Committee Analysis, CRA was concerned that the existing law might be interpreted to require that a customer "see the original price, minus a sales figure or percentage and then a sale price, all rung up sequentially." CRA argued that such an interpretation would be burdensome and would risk over-loading a customer with too much information; CRA maintained that "the most important thing to the customer is that he or she sees the actual price of each item he or she is paying for, not the price history of an item and what it might originally have cost."

CRA also noted that "the language in [this bill] has been developed in conjunction with county sealers who enforce price accuracy law at the local level."

With the occasion of legislative committees' review of the four year old law that was undergoing changes as it was about to fully go into effect, the Chapter was updated to supplant "Point-of-Sale Displays" for "Automatic Checkout Systems" in Article 1, to reflect changes in current law since the passage of AB 2732; and add Article 2, which is entitled, Point-of-Sale System Accuracy Verification. The bill made a number of other changes. Following are the five main legislative impacts of the new statute:

1. Revises and recasts the requirement that all price reductions, surcharges, taxes, and the total amount for each transaction be displayed for the consumer at least once before the consumer is required to pay for the goods or services.

2. Clarifies that, in cases of price reductions, the automatic checkout system is not required to display the amount of every discount, but must display either the discounted price for the item or the original price and the discount.

3. Requires that surcharges and the total value to be charged for the overall transaction be displayed for the consumer at least once before the consumer pays. This bill does not specifically require that taxes be displayed. 

4. Clarifies that "automatic checkout system" and "point-of sale systems" are the same system. Repeals the term "automatic checkout" and replaces it with the term "point-of-sale."

5. Replaces the definition for automatic checkout systems with the revised definition for point-of-sale system which is "a computer or any electronic system used to interpret the universal bar code or any other code that is on an item offered for sale to determine the price of the item being purchased regardless of whether the code is entered manually or automatically by a machine."

Additional details may be found by visiting  www.leginfo.ca.gov .