On Channel 4 in the UK last night, the Dispatches programme investigated some of the pricing practices of discount retailers and outlet stores. I’m not going to comment on the business ethics of those stores, but I do want to comment on their responses to the claims made by the programme. Some of the issues that arose could easily have been avoided.
Stores will often show the RRP (Recommended Retail Price) on a price ticket, to indicate to the customer the scale of the bargain they’re about to buy. For example, a product in TK Maxx was priced at £24.99, with a claimed RRP of £68.99; a significant saving, it appears. According to the programme, Government guidelines say “you should not use a recommended retail price if it differs significantly from the price at which the product is generally sold.” (Pricing Practices Guide, Department of Business Innovation & Skills, 1.6.1). The product in question, though it has what appears to be a fancy but unfamiliar brand name, is actually a TK Maxx brand, which is not sold by anyone else, so the RRP is actually meaningless and misleading. TK Maxx told the programme that it is their “policy not to put RRP on own brand products”; in the few instances where this hasn’t happened, it is “a product of human error.”
That’s the interesting part for me – how could they allow ‘human error’ to cause the RRP to be defined for own-brand products, and to be printed on tickets, in breach of their own stated policy? Where were the business rules that should have prevented this from happening? Where’s the data model that makes it obvious that own-brand products do not have a RRP? If they have a ‘target full retail price’ for own-brand products, that’s a different piece of data. Where’s the business process definition that describes how to print pricing tickets for own-brand products?
Perhaps the lack of all this is the ‘human error’ that TK Maxx referred to? If so, then they need to employ some humans to fix it, document their business rules, create their data models, and then implement them.