Tuesday, September 16, 2008

Yes, You Are Getting Less for Your Money

Do you remember my post from a few weeks ago regarding how Safeway cut the size of their Lucerne Yogurt without reducing prices? Well, it turns out that Safeway is not the only one using this dirty trick. CNN Money ran this article about a whole lot of other companies that are taking the same under handed approach for stealth price increases.

Once again - this is clearly one of those times when regulation is needed to prevent such intentional misleading of the public. Companies should be required to state in bold letters on the packaging every time they make a change to the quantity of product sold. Where is the FTC when you need them?


Traciatim said...

Regulation is exactly what we do not need here. What we need is people who actually care to buy competing products from any company that pulls this stunt. The profits will dry up and the company will change it's way. The consumer has all the power here.

Shadox said...

I completely disagree. Consumers can only act on their own if they have the facts. However, companies go to extremes to make sure no one sees and knows of the change.

Can you tell that a package is 2 oz smaller? You have to look at the label each time you purchase. Do you look at the label each time you purchase? I would bet you that no. Even if you do, do you remember the original size of each product you purchase? Again, I would bet no.

Consumers can only act, and free markets can only function, based on freely available information. In this case, information availability is clearly not simetric. Companies know that a change has been made, but consumers have no easy way of knowing. They simply have no access to the information.

The FTCs job is to ensure that the needed information gets into the hands of consumers, and consumers can then act on their own.

I am not suggesting that the FTC ban product size changes, only that companies should be required to disclose when such changes are made.

I will guerentee that if companies are forced to disclose their sneaky price increases this practice will simply cease to happen, since there will be nothing to gain. Companies will resort to plain price increases, which consumers can see, undertand and act upon.