17 Aug 2024

Supermarkets on notice: Overcharge and customer gets item for free - commissioner

1:28 pm on 17 August 2024

Consumer NZ says it is concerned grocery shoppers are being asked to spot price discrepancies and put them right, when it is the retailers' responsibility.

Kiwis may be losing tens of millions of dollars a year due to supermarket pricing errors, according to the Grocery Commission.

It is planning to force the major players to publicise customer complaints saying it will create a commercial incentive for supermarkets to make fewer mistakes.

The groceries sector was a $25 billion industry and had had years to perfect its system for charging, commissioner Pierre van Heerden told Morning Report.

He wants supermarkets to give shoppers the item for free if they report they have been overcharged.

Consumer NZ's head of research and advocacy Gemma Rasmussen said the commission should be monitoring pricing errors - and she agreed there should be more pressure on the supermarkets themselves to put them right.

Woman checking the grocery receipt using her smartphone

Photo: 123RF

Last year, shoppers provided Consumer with a huge body of evidence demonstrating the scale of problematic pricing practices at the major supermarkets, she said.

In 2023, it collected 600 examples of pricing errors which were provided to the Grocery Commission and these were being investigated.

Rasmussen said Consumer was concerned van Heerden had failed to address the systemic issues with major supermarkets' pricing discrepancies.

"This is not a pricing error here and there; we have done nationally representative research that has found that 65 percent of shoppers had noticed pricing inaccuracies at the supermarket and 12 percent are spotting them rather frequently."

Problems included the price on display not matching the price at the till, loyalty card pricing being displayed as the default, and multibuys that worked out to be more expensive than purchasing the products separately.

Rasmussen said supermarkets needed to sort their pricing and promotional practices out and Consumer NZ wanted to see "meaningful enforcement outcomes" - in the form of fines issued to supermarkets.

"It's a basic requirement that businesses display accurate prices. Shoppers are entitled to expect this at a bare minimum."

Rasmussen said simply reporting on the pricing errors was not enough and it wanted firmer instructions from the commissioner as to what the supermarkets would do to address the pricing errors.

She said shoppers shouldn't have to pay for supermarkets' mistakes, when financial stress related to food was so high. After rent and mortgage costs, food was the second biggest expense.

It comes from the top - commissioner

Van Heerden said the supermarket operators should provide more robust training for their staff.

"It's the responsibility of the boards and the senior managers to train all their staff and to get this right. It's just not good enough for Kiwi consumers."

One spur for more reliable pricing policies would be free groceries once a shopper pointed out they had been overcharged.

The refund policies needed to be more generous and supermarkets needed to be "stung" to get it right.

"They charge the wrong price and you get it for free. That should just be standard."

He had forced their hand by "calling this out" and expected to hear back soon from the three retailers, Woolworths, Pak n' Save and New World. All three had said they would review their policies.

Van Heerden was also highly critical of the supermarkets' policy on recording errors which should be part and parcel of doing business.

"You want to know what's happening in your stores."

Technology was now available so that every mistake at the till was recorded.

While one consumer might pick up a wrong price, there was the potential for dozens to go through the checkout and be charged the wrong price in a single day.

"I want it fixed at source."

Van Heerden said loyalty schemes would be delved into at a later date because consumers were giving away a lot of information in return for the cards.

RNZ has approached both supermarket operators for comment.

Additional reporting by Samantha Gee

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