Testimony Regarding Albany County Executive’s Public Hearing on Item Pricing Waivers

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30
Oct
2019

Testimony to
Albany County Executive’s Public Hearing on Item Pricing Waivers
Local Law C

Presented by
Name: John T. Evers, PhD
Title: Director of Government Affairs
October 30, 2019


Expanding the waiver system in Albany County

The history of local item pricing legislation in this county stretches back to 1992. At that time Albany County adopted the “Albany County Item Pricing Law” under local law 3 of 1992 and opted to establish its own system rather than default to the state system under Ag & Markets law. The law was further amended in 2009 as local law J. 

Briefly, under this system, stores that apply for a waiver and pay a fee, are allowed to forgo individual item pricing of each stock unit if it installs scanners that are synced with a check-out system that scans the units and are checked by County staff for accuracy. Shelf tag labeling is still marked near each stock unit and additional advertisement – often associated with sales - is also common since AG & Mrkts law sec 197-b on retail pricing states that the “easy to read shelf tags, or signs” combined with a check out scanner is deemed compliant with state law. Some exemptions apply, such as family-owned business and those with not more than 2 full time staffers. Small units not more than 5 ounces, items less than 3 cubic inches, items priced under $1, and fresh fruits and vegetables, eggs, milk, baby food and items in bulk, for instance, are not subject to item pricing. 

As you know, many advances in technology have made the system of inventory much more efficient and stores often ship from central locations to retail outlets. Likewise, items are more universally priced.  In the case of many supermarkets and convenience stores, pricing and inventory are often pared thus accurately reflecting both the complete stock of each item, its price, and its “best by” lot. 

The waiver system thus is a very closely linked with store operations. The need to individually mark each unit is unnecessary and often time consuming, not as accurate as scanning, subject to having labels come off, stuck to the wrong item, have to be changed on each item from time to time, and creates unnecessary work – and costs – to stores. 

Until now, only large retail stores have been entrants to the system. At $3,000 per store, per year, many small convenience stores are unable to afford the waiver. Similarly, since the stores square footage is also very small - in fact most fall between a few hundred square feet to 5,000 at the high end – they cannot afford the waiver. 

But why should you change this? Convenience stores are small – in fact a person would be no further away from a check out scanner than 15-20 feet in any direction; average sales at convenience stores range from 2.5 to three items - with many convenience stores not even needing anything larger than hand-held baskets for shopping (if that), and all items would still be subject to shelf pricing under state law. 

But how can a store justify $3000? They can’t – its not economically justifiable. But if you were to create levels based on square footage – then you could open the universe. It would then provide electronically, digitally accurate item pricing with a scan check easily viewed by consumers. Further it better utilizes the time of the weights and measures staff, adds an estimated $30,000 upwards in revenue each year (quite possibly more), and modernizes procedures to match other players in the sector. Consumers are better protected by the scanner system because it must be checked by weights and measures, it is linked with a central system to the register, and allows consumers to actually check the item BEFORE they check out. 

Tiers suggested are areas under 5,000 sq. feet at $750 per store and maintaining the County’s current level of $3000 per waiver for stores above 5,001 square feet. This law would impact only a few stores currently in the system out of nearly 100, it preserves the existing revenue source for the County (upwards of $280,000), recognizes the inventory differences in number of items stored at each location and thus subject to random accuracy tests (75 for large store 25 for small stores), and is being addressed well before the annual May application period. 

I note that such a tiered system is common in other counties and the price level per waiver is similar as well. This bill, which we hope will be signed by the County Executive, is similar to the proposals we have discussed with other local counties.   

We are eager to engage you and will answer any questions and hope that this improved and encompassing pro-consumer bill will be acted upon soon.