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cs702 a day ago

> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65. Bounty paper towels, shelf price $10.99, rang up at $15.50. Kellogg’s Frosted Flakes, Stouffer’s frozen meatloaf, Sprite and Pepsi, ibuprofen, Klondike Minis – shoppers were overpaying for all of them. Pedigree puppy food, listed at $12.25, rang up at $14.75.

Surely, now that this made the news, there will be an investigation into the fraudulent behavior of Dollar General and Family Dollar.

Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)

jeltz a day ago | parent | next [-]

It was investigated, the issue is that the fines are smaller than the profit. I would personally want to see things like this considered fraud and that it can result in prison sentences for executives and other people invovled in the decision making.

dawnerd a day ago | parent | next [-]

Ya the problem needs to be a fine the first time, second time it’s fraud. Allow for honest mistakes. Punish for clearly defrauding customers. We really need jail time for execs making these decisions but that rarely happens.

teeray a day ago | parent | prev | next [-]

Corporate fines should all be percentages of profits.

estearum a day ago | parent | next [-]

Pretty trivial to make profits "not exist" though if you planned to engage in fraud and wanted to de-risk it.

rsynnott 13 hours ago | parent | next [-]

This is why GDPR fines, say, are a percentage of _revenue_. Harder to mess with without getting into outright fraud.

estearum 12 hours ago | parent [-]

Yeah agreed this seems more directionally correct.

esseph a day ago | parent | prev [-]

They're a publicly traded company. If they drop profits substantially, I imagine shareholders etc would leave.

estearum a day ago | parent [-]

I'm pretty sure GP was suggesting a general enforcement framework, not talking about any particular company.

Anyway no, shareholders care about much more than simple profits.

esseph a day ago | parent [-]

Explain, please.

I ask because I've never invested in a company that wasn't very profitable. I'm trying to find out besides intense insider information why someone would. (I'm not VC clearly, just a retail investor.)

estearum a day ago | parent [-]

Explain how people care about more than just profitability?

If they didn't, everyone would be invested in the single most profitable company on the market, which they're not.

There are unprofitable companies people are perfectly willing to buy.

Growth, absolute revenue, rates of rates of change are all relevant depending on what you care about.

bruce511 21 hours ago | parent [-]

All the above. Plus it is absurdly simple to manipulate profit up or down.

For example, as an owner, I can be paid a bonus, or not. Crumbs, I can be paid a salary or not. If I want profits high, I simply take a low salary and no bonus. Or vice versa if I want profits low.

But that's the tip of the iceberg. Buying an asset this year, depreciated over the next 5, means higher profit this year, and 4 years of lower profit.

Marketing expenses this year, benefits next year, and so on. Drop the head count to juice profits for a couple years, raise head count to drop it, and do on.

Profits are the easiest thing to manipulate and hence the worst metric for fines. Which is why you see Europe use Revenue (not profit) as the measure for some fines.

estearum 12 hours ago | parent [-]

Yep, not to mention what you can do with complex conglomerates. For example, one should take a look at the intra-company eliminations that the giant pay-viders do (e.g. UnitedHealthGroup, owner of insurer/payer UnitedHealth and healthcare provider Optum)

Insurers are margin-capped, but wouldn't you know it once you own a PBM and the providers, you can make revenue, holdings, pricing power, and market share rise arbitrarily while never producing a profit beyond the cap.

a day ago | parent | prev | next [-]
[deleted]
ant6n a day ago | parent | prev | next [-]

Or revenue?

koolba a day ago | parent | next [-]

If movie contracts are any lesson, you always want to be on the gross. Too many ways to game the system otherwise.

JumpCrisscross a day ago | parent [-]

And that only works because the theatres aren’t controlled by the producers. Revenue recognition is its own field of ripe fuckery.

drekipus a day ago | parent | prev [-]

God yes

jeltz a day ago | parent | prev | next [-]

Percentage of global tärevwbue works. We know that from GDPR. But I would personally prefer prison sentences for the execs.

StanislavPetrov a day ago | parent | prev [-]

Revenue, not profit.

rtp4me a day ago | parent | prev [-]

You want prison sentences for execs if you were charged $1.50 for a can of corn instead of $1.45? Surely you can't be serious.

hedora a day ago | parent | next [-]

If there’s a paper trail showing they authorized it, and the total amount of fraud is enough for felony charges (a few thousand bucks, I think), then yeah, throw their asses in prison, and make them refund the money they had the business steal out of their personal funds.

I’m all for limited liability corporations, but if there is a smoking gun that shows you intentionally engaged in criminal activity, that should pierce the liability shield.

rtp4me 21 hours ago | parent [-]

Do you honestly believe a senior exec at a company specifically said to charge the customer more than what the price on the shelf says? Chances are, in the world of computers and automation, mis-pricing just happens. Its a chance we all take as consumers. You just have to be mindful when shopping.

maccard 17 hours ago | parent | next [-]

For all intents and purposes “mispricing” doesn’t just happen widely. This is a policy problem with the stores. The difference between an accident and fraud is intent - it’s pretty clear there’s systemic intent here.

> do you honestly believe a senior exec at a company specially said to charge the customer more than what the price on the shelf says

Yes. I 100% believe that a policy from management of a retail chain owned by PE would say “charge the till price not the sticker price”, and also separately “our policy is to ensure all prices are consistent by doing a price audit of every stickered item once per 6 months”. All that does is allegedly ensure they’re not ripping people off two days a year.

Tadpole9181 20 hours ago | parent | prev | next [-]

Why, yes, I actually do. Just like BMW execs specifically instructed engineers to cheat at emissions testing.

And last time I checked, you don't get to just say "oopsie woopsies, I only accidentally committed fraud of a mass scale exclusively in a way that benefits me for a prolonged period of time that would obviously show up on books and intentionally hid it until caught" and get out of punishment.

If I break the law, I get arrested. Or am I allowed to "accidentally" try to carry out a new PC from Best Buy several times in a row?

fzeroracer 20 hours ago | parent | prev [-]

I don't know about you, but shopping at major grocery stores I have rarely been mischarged and I check my receipts/final price pretty religiously. If Dollar Tree consistently overcharges people then there should be an investigation, discovery and jail time if they willingly enable fraud. And given that this entire thread is about how they frequently overcharge people I think it matters.

rsynnott 13 hours ago | parent | prev | next [-]

If it’s being done systematically, and, er, well, it certainly sounds like there’s a case to be answered there, then, well, why not, after a proper trial?

Like, imagine if your bank randomly took a few percent extra off each transaction. Someone would get in a lot of trouble for that, and at a certain point “we’re not doing fraud, we’re just staggeringly incompetent” won’t cut it.

lenlorijn 17 hours ago | parent | prev | next [-]

Why is incarceration suddenly not an appropriate possible punishment for theft if it is done by someone in a suit. These are hundreds of thousands, if not millions of dollars being swindled from poor people. Not a single 5 cent mistake as you try to make it out to be.

greycol a day ago | parent | prev [-]

If you really believe 5 cent transactions never amount to significant consequences why don't you send me 5 cents a million times.

rtp4me 21 hours ago | parent [-]

OK, and the next time you defraud your employer by $0.05 (take a longer break then needed, arrive late to work, etc) then you should spend the rest of your days in prison. Fair is fair, right?

squeaky-clean 20 hours ago | parent [-]

You're really missing the point here. If I defrauded a million companies for $0.05 yeah throw me in prison. If Dollar Tree defrauded a single customer of $0.05 that's very different than doing it millions of times.

ssl-3 a day ago | parent | prev | next [-]

Some people say it's trickery, but when I apply the razor I find pricing errors more likely to be the result of stupidity than of malice.

Having worked in retail myself, I understand that some days there just isn't time to get it all done. A debt of unfinished tasks can accumulate. It happens. Sometimes old prices get left up. (I think the stupidity is on the part of management more than it is the employees, but it's still more stupid than it is malicious.)

---

Dollar General got into the thick of it with the Ohio Attorney General a couple of years ago[1] over this issue: The prices on the shelf didn't always match the prices at the register. Stores were closed[2] while they updated their price tags to match reality.

And as part of the settlement with the Ohio AG: Nowadays, when I go into a Dollar General and Red Baron pizzas are on the shelf for $5 and they ring up at $7.65, they're required to honor the posted price of $5 when I bring this up to them.

(That last bit really should be enshrined in law instead of the footnotes of a legal settlement with a single entity, but alas: It just isn't that way in Ohio.)

[1]: https://www.ohioattorneygeneral.gov/Media/Newsletters/Consum...

[2]: https://www.supermarketnews.com/foodservice-retail/ohio-ag-d...

doctor_radium a day ago | parent | next [-]

I would like to think incompetence as well, but when the problem is this widespread, IMHO it does point to a corporate issue...even if that's simply leaving too many incompetent managers in charge. IMHO if you're the manager and the part-time teenager didn't finish updating all the shelf pricing, then it's on you to finish before going home. But today too many people just don't give a damn.

My first job was in retail as well, going back to the days before scanners when every item item was ticketed individually. When something goes on sale you ticket it again, then tear off the sale price stub when the sale ends. Repeat as needed. Maybe that could be a suitable punishment, too? Force stores to abandon shelf pricing for a period of time until it hurts enough that they get their act in order?

bruce511 21 hours ago | parent [-]

Where I live the rule is simple, and all stores adopted it.

If something is mislabeled you get (one of) free, and all the rest at the lower price. (And you see a worker skurry off to fix it immediately.)

And here's a shock, mislabelling is vanishingly rare... seems it can be done if desired...

nerdponx a day ago | parent | prev | next [-]

Hanlon's Razor is not relevant with large amounts of money at stake. in fact the complete opposite is the best approach: The more money that's involved, the more you should suspect malice until it has been conclusively ruled out.

shepherdjerred a day ago | parent | prev | next [-]

As a company seeking to maximize profit, why would you fix this problem? It seems optimal to say "it's out of our control" -- you get to overcharge customers, and you have a reasonable explanation if a lawsuit comes.

I would be curious to see how often it's the other way around, e.g. they undercharge a customer.

ssl-3 a day ago | parent [-]

I prefer to think that people (including those who run corporations at the level of -- you know -- price tags) are broadly more incompetent than they are malicious, dishonest, replete scumbags who would sooner stab a person in the back and take their wallet than give them the time of day.

It is possible that I am wrong about this.

shepherdjerred a day ago | parent [-]

I agree that people are usually good, but systems will be abused.

The first think I thought of was https://en.wikipedia.org/wiki/Ford_Pinto#Fuel_system_fires,_...

ryan_lane a day ago | parent | prev [-]

You're applying that razor incorrectly. These dollar stores are run with a skeleton crew, where it's impossible for the workers to keep the store in order, or to update the prices on the shelves. The prices of items at the register is managed centrally. They ensure resources exist to increase prices at the register and not on the shelves, and that's misleading and fraudulent.

This isn't a pricing error. They should change their practices to require prices be updated on the shelves, and for that to be verified, prior to the prices at the register applying (and this should be required by law).

It's funny that it's criminal when someone shoplifts from a dollar store, but knowingly showing one price and charging a higher price isn't a crime. We need to start treating corporate theft as crimes, rather than as a cost of business.

pjc50 a day ago | parent | prev | next [-]

This is very American: it's illegal, but everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process. There's no political consumer complaints culture, it's seen as an individual matter.

You couldn't get away with this for as long in the UK as a retailer. Either the CMA or Trading Standards would deal with it.

JumpCrisscross a day ago | parent | next [-]

> everyone accepts both that the law will be enforced very unevenly, and that this kind of thing doesn't get solved by the regular political process

Nobody agrees on that. TFA follows "a state government inspector" whose effectiveness is hampered solely by a "North Carolina law" which "caps penalties at $5,000 per inspection." That law [1] doesn't exist outside North Carolina.

This is the first time I'm reading about this. We have a dollar store in my town. I'm curious to replicate this experiment myself and send the results into the local newspaper if the discrepancy is real.

[1] https://www.ncleg.gov/enactedlegislation/statutes/html/bycha... § 81A-30.1

cogman10 a day ago | parent | prev | next [-]

> this kind of thing doesn't get solved by the regular political process.

Yeah it does. This is specifically the sort of thing that the FTC is in charge of addressing.

That is ultimately controlled by who the president is. There is some funding problems with these enforcement agencies that forces them to pick and chose their battles. However, you'd be naive to think that there isn't a significant difference from how Lina Khan ran things and how Andrew Ferguson runs things.

antonymoose a day ago | parent | prev [-]

Keep in mind, this is also a state thing. I live on the NC/SC/GA border so I view news for all three daily.

I routinely see this type of crime heavily policed and reported on in NC. Whereas my entire life is in coastal SC and never once in my life saw this repeated on or enforced.

nerdponx a day ago | parent [-]

In Massachusetts it's policed and enforced but the maximum fine per inspection is $5000 so it doesn't actually do anything (and it only applies to food anyway and stores are also allowed to exempt a fairly large number of items). https://www.mass.gov/info-details/accurate-scanning-and-pric...

nrhrjrjrjtntbt a day ago | parent | prev | next [-]

It was investigated. They got fined $5k. 4 times.

Is there another law that can get them for repeat abuse.

limagnolia a day ago | parent [-]

Their attorney general could also sue them, as was done in several states mentioned- resulting in much larger settlements. Only the fines by the dept of weights and measures are limited.

tzs a day ago | parent | prev | next [-]

>> Red Baron frozen pizzas, listed on the shelf at $5, rang up at $7.65.

The crazy thing is that even if it did ring up at the correct price it isn't a good deal. It's around $4.80-4.90 at Walmart and Target and others.

limagnolia a day ago | parent | next [-]

Paying 10 to 20 cents more for an item can still be a better deal than traveling further away to a larger store. The mis-pricing is completely unacceptable, though.

ryan_lane a day ago | parent [-]

But because these stores exist, they lead to grocery stores no longer existing, because they eat the majority of the profit from grocery stores. This forces people to shop at the dollar stores because it's the only thing nearby. The dollar store model increases prices, reduces consumer choice, and makes us less healthy.

limagnolia 12 hours ago | parent | next [-]

I haven't seen that happen, maybe it does in some places.

In my hometown, we had a grocery, but it closed in the earl 90s. They didn't get another on until the lat 00s. It was open a few years, had bare shelves most of the time and convenience store level prices when they did have something. In the late 10s, a Dollar General opened... so far, it has remained open, has much better prices than the previous attempts, and is generally much better stocked. The town hasn't grown in that time. But Dollar General is existing where no one had managed to survive before.

We'll see how it goes long term.

ryan_lane an hour ago | parent [-]

Dollar stores are one of the primary drivers of food deserts. Info on this is a quick google search away, as there's a ton of research around this: https://anderson-review.ucla.edu/how-dollar-stores-contribut...

energy123 15 hours ago | parent | prev [-]

Do they make higher margins?

ryan_lane an hour ago | parent [-]

On particular items, yes. As a whole, no. They have a lot of loss leaders, then rely on being generally overpriced to make that up. Grocery stores also rely on this, but at a larger scale, and when their higher margins dry up, they go out of business.

Dollar stores target grocery stores margin products, to drive them out of business.

delfinom a day ago | parent | prev [-]

It's worse than that. In many cases the dollar stores now get skus of items made for them that are "cheaper" than a sku in Walmart but for a more expensive unit price than Walmart as they shrink the product.

deepbreath1 19 hours ago | parent | prev | next [-]

I am a POS system developer. Such errors can occur in the systems I develop, but they are unintentional—often caused by price data synchronization issues. I am actively working to resolve them.

veunes 12 hours ago | parent | prev | next [-]

If a business model only works as long as customers don't notice the real price, then the model itself is fundamentally broken

wkat4242 a day ago | parent | prev [-]

> Left unsaid is that both Dollar General and Family Dollar would become unprofitable if they stop tricking customers. (Both companies typically earn only 3-4% on sales.)

They could of course show the actual prices instead of tricking customers?

If the margins are so low nobody else will be significantly cheaper anyway.