Posted on 11/25/2017 6:49:22 AM PST by Twotone
Every year since 2012, I have written and complained about Idaho’s Depression-era law that hurts businesses and consumers. Here it is again:
In 1939, the Idaho Legislature passed the Unfair Sales Act. That statute says, “The practice of selling certain items of merchandise below cost in order to attract patronage is a deceptive form of advertising and an unfair method of competition. Such practice misleads the consumer, works back against the farmer, obstructs commerce and diverts business from dealers who maintain a fair price policy, with the result of unemployment, underpayment of employees, excessive working hours, nonpayment of taxes and an inevitable train of undesirable consequences including economic depression. This act is designed to make illegal such practice and to promote the general welfare of the state of Idaho.”
Idaho’s law requires that retail prices be marked up to cover the cost of doing business, and in the absence of evidence to the contrary, that the markup must be at least 6 percent. What that means is, those massively discounted items on sale, whether at the big box store or at a Main Street merchant, are illegal.
Thus, if you bought or plan to buy a virtual reality headset or the latest smartphone or a flat screen TV, and the product costs less than retail, you’re getting a great deal. But the seller is breaking state law, and at a considerable risk. The penalty for violations is $500 for each offense and up to six months in prison. The seller doesn’t have to receive any money from a customer to break the law; merely advertising a product at below cost is a crime.
(Excerpt) Read more at idahofreedom.org ...
When I was an undergrad, living in Utah after getting out of the Navy in 1982, I came up against a similar law in Utah because I was managing 8 Circle-K convenience stores and dropped prices at one to attract customers. We were called on it because we were selling at fuel-cost which was below overall cost and while it was profitable in the big picture, it was an apparent unfair and illegal business practice.
I can understand why such laws are made.
If Huge Store Chain moves in to a town and sells items there at a loss but subsidizes that particular store with profits from other locations UTIL local competitors are forced to close the end result is a monopoly.
UNTIL
I would bet its enforced about the same as Jay Walking.
I remember when the milk price “police” came into the store where I was working, ready to quash our sale. He claimed our milk pricing was a loss-leader. The District GM replied, “yeah, at a grand opening sale, having loss leaders? Get thee gone.” And he skedaddled.
I thought (heavy emphasis on ‘thought’) that was referred to as ‘predatory pricing’ and was already illegal under federal law.
“I would bet its enforced about the same as Jay Walking.”
Loss-leader laws are in about 20 states.
The giant embarrassment that has become "Black Friday" (why dont the blacks complain about that?), and by giant I refer the physical girth of the participants waiting in line then assaulting their fellow man to get a few bucks off a cheap gadget that wont even work like it was advertised to right out of the box.
Absolutly love the wording of the law. It had to be one of Pelosi's ancestors who came up with "and an inevitable train of undesirable consequences including ...."
Thats almost as good as "You have to pass the bill to see whats in it!
Auto dealers are the biggest abusers of the law with their “at below cost”, “ “Liquidating”, and of course the ol “ cash back to you”!! crap. How many have actually got cash put in their hand after buying a car from a dealer? Im sure the term “bait and switch” brings auto dealers to mind.
The real end result is that the consumer will turn to the internet to purchase from out of state merchants which also circumvents state sales taxes.....
According to this law every business would have to sell products at cost plus 6%, or more.
Problem is every business can have wildly different costs for the exact same products.
This moronic law would make it illegal for any business to try to compete with Walmart, because Walmart can prove their costs are much lower.
“The real end result is that the consumer will turn to the internet to purchase from out of state merchants which also circumvents state sales taxes..... “
At some point a really smart state will lower sale taxes to zero to attract online retailers.
The problem isn’t taxes. The problem is spending.
It’s OK to sell below cost when I am the seller. But not when the Chinese are the seller.
Or
It’s OK for me to tell you how to run your business
But not for you to tell me how to run my business.
Yes
What about the Working Girl, on the street?
At least 6% above cost?
Here is what I was told by my teacher sixty years ago.
A small town has two grocery stores, two drug stores, two shoe stores two cafes. Two of everything. All this is to prove there is NO monopoly of business in the town.
BUT, each store has an under the table handshake that each will not undercut the other so both can keep their prices high. The city Council privately agrees to this as they will also get their cut. They will also keep other business out as they might “upset the apple cart”.
So, some store comes to town, is refused permission to open, so the store opens OUTSIDE the city limits, and cuts prices, driving the high dollar stores to either cut prices or go out of business.
You would be surprised (OK, no you would not) at the number of empty stores we have in town everywhere we have lived. And this was taking place BEFORE Sam Walton started his Walmart.
The government does not have to right to tell a seller how much to charge, or how much profit to make.
“Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims.”
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