Gov. Mikie Sherrill on Thursday signed the “Fair Price Protection Act,” a bill NJBIA opposed because it could lead to unintended consequences, such as the end of some loyalty programs, coupons and customer specific discounts due to new limits on collecting consumer data.
Sherrill signed A-4085/S-3612, sponsored by Assemblyman Chigozie Onyema (D-28) and Senator Joseph Cryan (D-20), inside the Our Community Grocery Store, a food co-op started by nonprofit Clinton Hill Community Action in Newark’s South Ward. In addition to outlawing pricing strategies that vary the sale price of groceries and foodstuffs based on personal data, the law also imposes a one-year moratorium on installing new electronic shelf labels.
“Deals are fine. Surveillance-driven surcharges driving up costs are not,” Sherrill said at a news conference before the bill signing. “If companies violate your privacy to try and make a buck, they'll be held accountable under our state's Consumer Fraud Act, and that's not all.
“The bill also puts a one-year pause on new electronic shelf labels-the tiny screens that stores can use to instantly change prices. We're going to study their impact to make sure they aren't hurting New Jersey's shoppers or workers.”
NJBIA President and CEO Michele Siekerka said she appreciated the intent of the legislation, but it presented a “false choice between consumer protections and operational efficiencies for our store owners – when it could have achieved both.”
Although the governor and sponsors of the legislation noted the law does not specifically ban discounts and loyalty programs, the practical effect may be the demise of both, Siekerka said.
“In the end, this law will compromise the very cost-saving programs that consumers rely on, particularly during an affordability crisis,” Siekerka said. “Rather than recognizing the strong consumer protections and unit pricing rules already in place in New Jersey, our policymakers once again sought to go one step further and to make New Jersey businesses the bad guy when most are simply trying to communicate prices in a timelier and more efficient manner.”
The law prohibits brick-and-mortar stores from installing new electronic shelf labels for one year. However, businesses are allowed to repair or replace existing electronic shelf labels that were already in use before the moratorium began.
During the moratorium, the New Jersey Innovation Authority, in consultation with the Division of Consumer Affairs, will conduct a study on electronic shelf labels to examine their potential impact on surveillance pricing. Sherrill said she wants to make sure that stores aren’t charging people more for items when they shop on certain days of the week or certain hours of the day.
The law gives the state Attorney General the power to bring civil actions for violations, seek injunctions, enforce compliance, and obtain damages or other relief. Each violation can result in actual damages or a minimum of $50,000, whichever is greater.
Cryan, the Senate sponsor of the legislation, said he hoped New Jersey’s consumer pricing law would become a national model for other states. Siekerka, however, said the bill was an example of another New Jersey law that makes the state an outlier for business.
“This is yet another change in the rules of how to do business in New Jersey, bringing even more uncertainty when our job creators need predictability to conduct business and make investments in the future,” Siekerka said.
To read Siekerka’s entire statement, go here.
