New Digital Price Tags Raise Concerns Over Fair Pricing

Have you noticed those new-fangled price tags on your grocery store shelf?

These plastic tags with high-contrast digital labeling are known as "electronic shelf labels" or "ESLs."

These digital labels allow the store to change prices in an instant -- and without much effort.

Now couple that with data that stores have collected from loyalty programs, area demographics and buying habits.

There's a high-tech potential for shenanigans at the check-out counter.

Grocery stores love the ability to change prices without spending a lot of time and money on labor to do it. And to use data to fine-tune pricing to maximize profits.

But with these high-tech tools come the potential of abuse.

Now Minnesota lawmakers are joining union grocery store workers in calling for a ban on what's known as "surveillance pricing," "personalized pricing" or "dynamic pricing."

That's the practice of using personal data about a shopper "to set personalized, individualized prices for goods and services."

How could this be bad for consumers?

Let's say a store wants to maximize profits and raises the price of items Friday through Sunday when many of us do our weekly grocery runs.

Or a snowstorm is forecast for a given area and prices shoot up as shoppers flock to the store to get ready to stock up.

Or a retailer uses personal data about you -- your income, browsing history, location, Zip code -- to show you a different price than someone else.

Lawmakers in Minnesota and 11 other states have introduced legislation from the United Food and Commercial Workers Union's legislation addressing surveillance pricing and artificial intelligence-driven technology that could drive price changes in those electronic shelf labels.

The UFCW is working with state and federal lawmakers to push for laws to limit the use of surveillance pricing and ESLs in stores.

Specifically, their goals are to:

• "Require stores to use clear, printed shelf prices that everyone can see and trust.
• "Ban “surveillance pricing” so no one is charged more based on who they are.
• "Give state attorneys general the authority to enforce these rules and allow consumers to take legal action if stores break them."

Minnesota lawmakers joined UFCW officials this week for a news conference in support of bills in the state legislature limiting the use of ESLs and surveillance pricing tactics.

According to Consumer Reports, that bill "prohibits the use of data related to a person’s characteristics, behavior, or biometrics to automatically and secretly inform the price or wage they are offered. It also includes thoughtful exemptions for commonly understood group discounts, for insurers relying on risk-relevant data, and for refusals to offer credit based on data covered by the Fair Credit Reporting Act."

But ESLs and personalized pricing aren't likely going away anytime soon.

In fact, Walmart officials say they plan to have the electronic pricing labels on the shelves of 2,300 US stores by the end of the year.

And Walmart's not alone. The ESLs can be found at Aldi, Target -- even Coborn's.

Meanwhile, back at the State Capitol...

The Minnesota House of Representatives' Commerce Finance and Policy Committee heard a version of the bill in early March, but as of this writing, it has not yet been voted out of committee.

A companion Senate bill has been referred to the Commerce and Consumer Protection Committee, but has not yet been heard.

The legislation is viewed as "preventative regulations" -- there haven't been any confirmed cases of grocery stores charging different individuals different in-store prices based on personal data.

At least, not yet.