News Story

Michigan Item Pricing Regulations Among Nation's Most Strict

Michigan Gov. Rick Snyder didn’t take long to let the retail business community know that he’s heard their concerns about over-regulation. In his State of the State address, the Republican governor called for lawmakers to help him strike down a law that one trade organization has called one of the strictest in the country.

Snyder called the “Item Pricing Law” an undue burden on retailers.The law requires that most items on store shelves being sold be individually priced. He asserted that the item-pricing law cost Michigan’s economy $2 billion dollars a year. His office didn’t respond to a message left asking how they computed that $2 billion figure.

Tom Scott, senior vice president at the Michigan Retailers Association, said Michigan has the most restrictive item pricing law in the country.

“We want the options for pricings expanded and not be reduced to a sticker,” Scott said. “There is all these new technologies  …  and we are bound by this antiquated law that says,  ‘You got to put a sticker on it.’ It’s time is way past.”

The law has meant big fines in the past for chain stores.

Walgreens paid a $550,000 fine and Wal-Mart paid a $1.5 million fine in 2006 for violating the item-pricing law. Both store chains had not individually priced items. In the Walgreens case, the state sent out investigators to six Walgreens stores.

Then-Attorney General Mike Cox asserted in a news release that Wal-Mart’s $1.5 million fine was “the largest fine in state history.”

Cox, like each Michigan Attorney General dating back to passage of the item pricing law in 1976, was an aggressive enforcer of the law.

"This far-reaching and innovative settlement will help assure continued item pricing compliance by Wal-Mart," Cox said in the release. "It is my hope that it will also serve as a notice to other Michigan retailers that violation of Michigan’s item pricing laws will not be tolerated. Michigan's law is clear: items on store shelves must be clearly marked with a price tag, so consumers know how much an item costs before they reach the checkout register and can verify that they were not overcharged after leaving the store."

Michigan is one of just ten states that have an item pricing law, according to an October 12, 2010 analysis published by David Wyld, the Robert Maurin Professor of Management at Southeastern Louisiana University.

Wyld writes that Michigan’s law is particularly strict:

“In Michigan, the state’s IPL covers almost every item for sale in any retail outlet priced over 30 cents, while in other states, IPL laws are restricted to food stores.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.