Price scanners' rate of errors low, FTC says 18-month study covers 17,000 items in 294 stores in 6 states

THE BALTIMORE SUN

Do you ever wonder whether the computer is cheating you as the supermarket clerk shuffles a week's supply of groceries past the checkout scanner?

Odds are it isn't, the Federal Trade Commission reported yesterday.

It's not that the people running the machine don't make mistakes, it's just that most of them tend to be in your favor, the FTC said. On average, computer scanners err about 5 percent of the time, although in some types of stores, the error rate can be as high as 9 percent.

Those figures come from a national survey by the FTC and the National Institute of Standards and Technology. Covering 294 stores in Florida, Michigan, Tennessee, Vermont, Wisconsin and Massachusetts, the 18-month study is believed to be the broadest to date on scanner accuracy, and in part responds to complaints nationwide from consumers suspicious of the scanners.

FTC officials say that the survey provides a snapshot of scanner error rates nationwide.

But Maryland officials say that based on their random checks of scanners, they believe the error rate here is probably about 3 percent on average.

The FTC report shows a greater likelihood of overcharges at drug and home improvement stores.

"There is a need, as proven by this report, to be diligent in the way we watch pricing," said Jodie Bernstein, director of the FTC's bureau of consumer protection. "But mostly this is good news."

Bernstein cautioned that some stores "have some work to do to push back a persistent swell of consumer mistrust in the technology."

On average, food stores had the lowest error rate -- about 3.5 percent -- and department stores the highest, at 9.1 percent.

More than half the time, though, customers were undercharged. The costliest errors amounted to average overcharges of $9.80 at home improvement stores and $7.62 at department stores.

"We hope this will be an impetus to retailers to be diligent -- they're losing money," said Bernstein.

Investigators checked prices on 17,000 items during the study. Officials did not identify the stores where they shopped.

The number of merchants using price scanners has nearly doubled since 1990. Grocery stores were the first to install them in the 1970s.

But in the past five years, department stores, mass merchandisers like Kmart and Wal-Mart, and drug and home improvement stores have followed that lead. Convenience and automotive stores are now joining the others.

The systems have many advantages -- a speedier checkout process, detailed receipts showing what was purchased and the amount paid, and reduced labor for retailers, who used to pay workers to individually tag every item.

The old system sometimes had error rates as high as 16 percent, studies showed.

The modern-day mistakes of computer scanners remain linked to human error, said Tom Brady of the Uniform Code Council, a non-profit group that monitors computer bar codes.

Most often they occur when stores fail to update the computer systems with current prices, he said.

"When you have some stores making 3,000 price changes a week, it really isn't a case of fraud," Brady said. "It's hard to get that many changes into the system correctly."

That vulnerability has prompted a number of states to enact better safeguards. Some have heavily penalized merchants who overcharge.

A large discount-store chain in California was fined $985,000 in penalties two years ago for alleged scanner overcharges. In Wisconsin, state authorities negotiated an agreement with a mass merchandiser that required it to pay a "bonus" to any customer overcharged.

And some states still require stores to individually price each item, even with the scanner system.

Maryland is not among states that have enacted tougher regulations. No merchant in Maryland has ever been fined for scanner overcharges, said Louis Straub, chief of the weights and measures section for the state Agriculture Department, which does random checks of scanners.

"We've really not had the complaints, except from food stores," he said. In those cases, inspectors required that changes in the computer systems be made on the spot and no fines were issued.

But his task is bound to become more difficult as more and more retailers turn to computerized pricing. His staff of 22 has about half the number of inspectors the department had in 1990.

"We've had less resources than we've ever had before -- it's tough to expand" inspections, said Straub.

Pub Date: 10/23/96

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