Legal Reference Blog by Renee C. Walsh, Attorney

10/07: Discussion of Michigan's Scanner Law and Exceptions

Question:

"I bought produce on sale and was charged the full price. When I asked for the bounty the clerk said it does not pertain to sale items. Is she correct? The produce did not have a price sticker affixed."

A frequent inquiry is what are the exceptions to the scanner law and the short answer is THERE ARE NONE.


Michigan's scanner law is a part of the Pricing and Advertising of Consumer Items Act, which was implemented in order to regulate the pricing and advertising of consumer items, services, goods, merchandise, commodities, and real property. The portions of the Pricing and Advertising of Consumer Items Act relevant to the within discussion essentially provide that the price of an item must be clearly indicated and stamped or affixed to the item. The price only has to be indicated nearby and not stamped or affixed, if the item is:

-sold by weight or volume and not packaged;
-sold in a vending machine;
-prepared food for immediate consumption;
-sold by mail / catalog order;
-unpackaged food, 3 oz. or less - 3 cubic inches - .30 cents or less;
-live plants and animals;
-motor vehicles or parts;
-packages of 20 or fewer cigarettes; and
-greeting cards sold individually.

Finally, a retailer also gets to post in a conspicuous space in the retail store 25 classes of items featured at a reduced price without stamping or affixing the individual pricing.

The scanner law portion of the Pricing and Advertising of Consumer Items Act is found at MCL 445.360 and 445.360a. These sections specifically address sales completed through an automatic checkout system. If there is a a price stamped or affixed to the item and the sale is recorded by the automatic checkout system, and the buyer is given a receipt, then the bounty comes into play. The exceptions provided in the Pricing and Advertising of Consumer Items Act allow merely for certain items to be priced / advertised in a certain way. Some items must have their price affixed or stamped to the item, others may have their price conspicuously identified nearby, while others may be listed in a conspicuous spot in the store. The exceptions provide for different ways to identify the price of an item.

After reviewing the specific sections of the Act, it is this author's opinion that THERE ARE NO EXCEPTIONS to the applicability of the bounty. Despite how the item is advertised for sale, if there is a price stamped or affixed to the item even if it is not the correct price, if the sale is scanned automatically and the buyer is given a receipt, and the item does not scan as the price advertised for sale, then the buyer is entitled to the bounty.

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For further analysis, the sections of the Pricing and Advertising of Consumer Items Act are summarized as follows:

The statutes the comprise the Act are referred to as sections as for example, MCL 445.351 is section 1 while MCL 445.352 is section 2 and so on. Section 1 defines the terms used in the Act.

(a) “Advertising” means all representations disseminated in any manner by any means for the purpose of inducing, or which are likely to induce, directly or indirectly, the purchase of a consumer item, service, good, merchandise, commodity, or real property.

(b) “Automatic checkout system” means an electronic device, computer, or machine which determines the price of a consumer item by using a product identity code, and may but is not required to include an optical scanner.

(c) “Class of item” means a group of consumer items which may vary by brand, style, pattern, color, or size other than weight or volume. Items within a class must otherwise be identical and offered at the same total price.

(d) “Consumer item” means an article of tangible personal property used or consumed, or bought for use or consumption, primarily for personal, family, or household purposes.

(e) “Director” means the director of the department of agriculture or his authorized representative.

(f) “Person” means an individual, firm, partnership, corporation, association, or other legal entity.

(g) “Sale at retail” means the transfer of an interest in a consumer item by a person regularly and principally engaged in the business of selling consumer items to a buyer for use or consumption and not for resale.

(h) “Total price” means the full purchase price of a consumer item, excluding sales tax and container deposit.

Section 2 provides that the director shall be responsible for promulgating rules and the implementation and administration of sections 3 and 4 and shall investigate complaints concerning violations of sections 3 and 4, and shall conduct such other investigations as he deems advisable.

Section 3 addresses stamping or affixing total price of consumer item. It provides that the total price of a consumer item displayed or offered for sale at retail shall be clearly and conspicuously indicated so as to be readable and understandable by visual inspection, and shall be stamped upon or affixed to the consumer item. If the consumer item is in a package or container, the total price shall be stamped upon or affixed to the outside surface of the package or container and need not be placed directly upon the consumer item. The price does not have to be so indicated if the item is (a) sold by weight or volume and not in a package or container; (b) sold in a coin operated vending machine; (c) prepared food intended for immediate consumption; (d) purchased by mail or through catalog order, or which is not otherwise visible for inspection by the consumer at the time of the sale, and which is ordered or requested by the consumer; (e) an unpackaged food item; (f) a consumer item which has a total weight of not more than 3 ounces, a total volume of not more than 3 cubic inches, and a total price of not more than 30 cents; (g) a live plant; (h) a live animal; a (i) motor vehicle or (j) motor vehicle part; (k) a package of 20 or fewer cigarettes; (l) a greeting card sold individually which has a readable coded price on the back of the card; or (m) merchandise ordered as a gift by a consumer which is sent by mail or other delivery service to a person other than the consumer by the retailer at the request of the consumer. There is also an additional exemption for consumer items which a retailer may choose to not individually price mark. A retailer may choose to not individually price mark 25 classes of items or individual items which are advertised or featured at a reduced price. These items have to be listed and posted in a conspicuous place in the store and shall be indicated by a clear, readable, and conspicuous sign in immediate conjunction with the area in which the unmarked item or class of items is displayed.

Section 4 addresses charging more or less than price indicated and what constitutes evidence of a violation. It provides that a person shall not knowingly charge or attempt to charge for a consumer item a retail sale price exceeding the price required to be indicated pursuant to section 3. It is not a violation of the act to charge less than the price required to be indicated pursuant to section 3. Furthermore, it shall be prima facie evidence of a violation if a price charged or attempted to be charged as a result of electronic identification or calculation by an automatic checkout system exceeds the price required to be indicated pursuant to section 3.

Section 5 addresses advertising the availability of a consumer item at a sale price, special price, or reduced price. It does not apply to baked goods, fresh fruit, and fresh vegetables. It provides that a person shall not knowingly advertise the availability of an item for sale at a special price or as being reduced in price unless the advertisement includes the dates that item is available, or the quantity available at the advertised price together with information that the item is available at that price only as long as the advertised quantity lasts. A limitation on the quantity available of a consumer item per customer shall be clearly disclosed in an advertisement of the consumer item. If a consumer item is advertised at a specific price through the media and it is not on sale, the advertiser shall make it available at the advertised price for not less than 5 days after the date the consumer item was last advertised. If the item is not available for this period of time then the advertiser must provide a written guarantee to deliver under the advertised conditions. The advertiser shall not be required to make the consumer item available if the unavailability of the consumer item is due to a governmental action, a plant closing, or an act of God and if the specific cause of the unavailability of the consumer item is posted conspicuously for the review of the consumer.

Section 6 addresses deception and untrue statements in advertising. It provides that a person shall not knowingly make, publish, disseminate, circulate, or place before the public an advertisement which contains a statement or representation which is untrue, deceptive, or misleading. Failure to sell goods, merchandise, commodities, or services in the manner advertised, or the refusal to sell at the price at which it was advertised, or in accordance with other terms and conditions of the advertisement creates a rebuttable presumption of an intent to violate the Act. In determining whether advertising is deceptive or misleading, the extent to which the advertising fails to reveal facts which are material in light of the representations made or suggested in a positive manner shall be taken into account.

Section 7 addresses discrimination in advertising real property.

Section 8 addresses publication of advertisement in good faith and without knowledge of falsity or deception. It provides that the Act shall not apply to an owner, publisher, printer, agent, or employee of a newspaper or other publication, periodical, circular, including those circulars prepared for national distribution, or outdoor advertising or of a radio or television station, who in good faith and without knowledge of the falsity or deceptive character of an advertisement, publishes, causes to be published, or takes part in the publication of an advertisement in violation of this act.

Section 9 provides for an injunction and penalties. It provides that the attorney general may maintain an action to enjoin a continuing violation. If the court finds that the defendant is violating or has violated the Act, it shall enjoin him from a continuance of that violation. It shall not be necessary that actual damages to a person be alleged or proved. It also provides as to knowing violations of the Act, a civil penalty of $1,000.00 for the first violation and not more than $5,000.00 for the second and any subsequent violation.

Section 10 provides for a declaratory judgment, an injunction, damages and attorneys' fees if the attorney general or prosecuting attorney fails to initiate action within 60 days after receiving notice of an alleged violation of the Act. It provides specifically that a person may bring an action to obtain a declaratory judgment that a practice is in violation of the Act and/or enjoin by temporary or permanent injunction a person who is engaging or is about to engage in a practice in violation of the Act. A person who suffers loss as a result of a violation may bring an individual or a class action to recover actual damages or $250.00, whichever is greater, for each day on which violations of the Act have been found together with reasonable attorneys' fees not to exceed $300.00 in an individual action.

Section 10a provides that except for sales at retail in which the seller intentionally charges more for an item than the price stamped or affixed, section 10a applies to a sale at retail as to which there is a price stamped on or affixed to the item, the sale is recorded by an automatic checkout system, and the buyer is given a receipt which describes the item and states the price charged for the item. It provides that before bringing or joining in an action, within 30 days after purchasing an item, a buyer who suffers loss because the price charged for the item is more than the price stamped on or affixed to the item shall notify the seller in person or in writing that the price charged is more than the price stamped or affixed. The notice shall include evidence of the loss suffered by the buyer. If, within 2 days after the notification, the seller tenders to the buyer an amount equal to the difference between the price stamped or affixed and the price charged, plus an amount equal to 10 times that difference but which is not less than $1.00 or more than $5.00, the buyer is barred from any further recovery for that loss. If the loss is suffered by 1 buyer within 1 transaction on 2 or more identical items, the amount to be tendered by the seller shall be the difference on each item, plus an amount equal to 10 times the difference on a single item but which is not less than $1.00 and not more than $5.00. If the seller does not tender this amount, the buyer may bring or join in an action.

Section 11 provides that a prosecuting attorney may conduct an investigation pursuant to this act and may institute and prosecute an action under this act in the same manner as the attorney general.

Section 12 provides that the act shall not affect any other cause of action which is available and shall be liberally construed to effectuate its purpose. A city, village, township, or county shall not enact an ordinance or other regulation inconsistent with this act or with a rule promulgated under this Act.

Section 12a excludes nonprofit food cooperatives from the Act.