Open your eyes...

We all know that prices of just about everything are going up at a truly frightening rate, but does this mean that stores are justified in re-pricing goods already on shelf?

The assumption, of course, is that the retailer acquired the goods at a lower price and then simply slapped a new price on them, inflating their profit margin.

It's a practice which generally fills consumers with outrage when they spot it - as Felicity Gray and her husband did at Incredible Connection in Gateway shopping centre, Umhlanga recently.

"We went to the store to replace our printer's ink cartridges. As my husband picked up what he needed from the shelf, an assistant told him to check the price as his colleague was busy re-pricing the old stock - in full view of customers!" she said.



"When we queried this with the manager, all he would say was that the new boxes had come in marked for sale to the public at R389.95 and so the old stock - marked at R359.95 - had to be changed."

The instantaneous R30 price hike didn't impress the couple.

"These shops already have a high enough mark-up without making more of a profit out of the consumer," Felicity said.

"They did reverse the amount for us back to the original of R359.95 but I wonder how many other consumers will be caught out."

So I approached Incredible Connection - part of the JD Group - for comment.

Merchandise executive Roger Wood said that when new stock arrived at higher prices than those already on shelf, "we use the difference between the two costs as the new cost price".

He's essentially saying that using this averaging price formula, the actual new price is lower than it would have been had the price of existing stock not been adjusted. So if the old cost price was R50 and the new cost price R80, the adjusted cost price - for both old and new stock - would be R60.50.

"This affects our on-shelf selling prices, which need to be adjusted at store level," he said.

"The same applies when cost prices are lowered, so selling prices are also lowered."

The repricing formula was only used when new stock was absolutely identical to the existing stock on shelf, Wood stressed. This was to avoid having two identical items on shelf at two different prices, he said. Which was, ironically, what the Grays encountered.

"In all other cases, which is by far in the majority, the customer will immediately reap the benefit in the price of the previous models already on shelf."

Wood did concede, though, that it was a bad idea for store staff to be seen by customers re-pricing existing stock on the retail floor.

The rise in the cost price of ink cartridges was as result of the rand-dollar depreciation, he said, as they were imported.

"Incredible Connection does not take price increases lightly and we have a dedicated team of buyers whose primary responsibility it is to ensure that suppliers are not taking unnecessary profits," Wood said.

Felicity called this explanation "fair", but pointed out that despite shopping at Incredible Connection frequently, she's never seen an on-shelf price being decreased.

"I still believe that the customer should not bear the brunt of the economic downslide, especially on goods that are already on the shop floor," she said.

Interestingly, the final draft of the Consumer Protection Bill, due to go before Parliament next month, states: "A supplier must not require a consumer to pay a price for any goods or services if more than one price is concurrently displayed, higher than the lower or lowest of the prices so displayed."

More reason for retail stores to get its prices adjusted - consistently - behind the scenes.