'Sticker Tax' Ready For Repeal

June 21, 2005
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While Gov. Jennifer Granholm conjures new fees and taxes primarily targeted at the service sector to balance the state budget, area legislators continue to chip away at the excessive regulation in Michigan. One notable example is item pricing, an unquestionable burden for Michigan retailers costing millions for each.

State Rep. Dave Hildenbrand, R-Lowell, may finally see House passage this month of the Pricing Modernization Act he introduced in April, amending a 1976 state law that requires a price sticker be attached to every item sold by a retailer. As might be expected, Michigan is the only state requiring such labor-intensive, often duplicative effort (prices are usually listed on store shelves, as well), and as might be expected, labor unions — not consumers — offer the most vocal opposition to such a change. Consumers receive the benefit of price reductions, and far greater price accuracy.

The new legislation continues the item pricing only on food items. It further requires that retailers place scanners every 5,000 square feet (and printable scanners every 10,000 square feet) to indicate prices, and that the retailer clearly display prices with "readable" signs directly above, below or adjacent to the item. During hearings around the state, retailers have indicated the elimination of item price stickers would allow them to move those workers involved in the labor intensive operation to the service side of the business to restock shelves, assist customers — and clean. (A study by five independent university researchers found those to be the top "issues" for consumers in Michigan.)

House Bill 4636 also provides retailers the option of using the new Price Accuracy System, which allows consumers to scan a barcode at the bottom of a receipt to assure the accuracy of the prices charged them. The accuracy of the system has proven to be 98 percent, compared to a 15 percent to 20 percent error rate with sticker items. Each retailer is required to provide a quarterly audit of the store scanning systems and provide proof of at least 98 percent accuracy. The legislation doubles existing penalties for inaccuracies.

Hildenbrand's bill also allows retailers to keep the current system, one that might be preferred by very small retailers (a neighborhood business, for example).

It seems simple enough but legislation has been put off for more than five years, with protests from union lobbyists. It is well past time for Michigan to join the 49 other states in the new millennium.    

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