As we have seen there has been much talk about the ethical and legal violations that have been occurring at the Johnson Mega Mart, there has been a lot of customer and investor loss many of the investors have been frustrated with these reports and because of the declining in sales many stores are closing. There also have been many different lawsuits that have occurring because of advertising that was not as it should have been causing customers to regard this to false adverting. Also there has been price scanning causing customer to feel as if they are being over charged for items. Other problems facing this company are product concern, suppliers that are not happy and many other personal issues.
As a manager I need to look into the ethical and legal issues in these matters that are taking place within our store. I will research the federal and laws that are here to protect the customers against false adverting and other issues that are happening with the organization.
This type of advertising is very bad press for the store so we need to correct it as soon as possible, in order to protect our stores that are still open.
As I begin to look into this matter I will begin with the federal and state laws that need to be in place for all retail stores. Customers have many rights and pricing has always been a big issue when advertising and item for a certain sale price.
Advertising will protect the customer, advertising a practice is a nationwide law it protects the customer against unfair pricing. Many unfair advertising practices have raised much concern with the FTC (“STATEMENT OF POLICY REGARDING COMPARATIVE ADVERTISING”, August 13, 1979, p. 1). This is why there are laws that protect the customers from false advertising. If we see that there is a problem with a store we are able to file a complaint against these stores for unfair business practices. Marketing scams have also become a big issues getting customers to start shopping there stores and then find out later that the advertising was deceptive. As more of these scams are happening online it leaves all customers wondering if these ads are fake or real. So it is important to have laws in place to protect the customers.
Examples of false adverting is many ads that we see on TV selling a diet products and pills that will help you feel like a million bucks this is false adverting, it looks great until you order the product and find out it isn’t what the advertisement stated.
Next I will look into the Better Business Bureau as the BBB has been around since 1916, this agency operates by protecting customers against fraudulent business practices, and many of these complaints come from customers that are complaining about fraudulent adverting and sales (“BBB”, 2010, p. 1). The BBB operates with local offices that are financed by many local businesses, as our business has belonged to this organization, you join and become a member and with this membership this tells your customers that you are dependable business and that you can be trusted. When joining the Better Business Bureau this helps new business get credited in their town. It will also help the businesses develop ethical and responsible advertising by providing them with the proper tools and guidelines that need to be followed in order to become a responsible business.
As all states have different laws protecting their customers against item pricing scanning where you are being over charged for an item.. I live in the state of Michigan I looked into our office of the Attorney General there I found that there is a bill of rights that deals with item pricing. In our state of Michigan this law requires that most items that are on the store shelves have to be clearly marked with price tags in order to sell that product. In Michigan if you scan an item that is not marked as the price tag has showed then you will be in tiled to a refund. So if you get over charged in Michigan for an item you have thirty days to bring it back to the store. Within two days of receiving your notice, the seller may choose to refund you the difference between the amount charged and the price marked plus a “bonus” of ten times the difference, with a minimum of $1.00 and a maximum of $5.00. If the seller refuses to give you both the refund and the bonus, you may bring a lawsuit to recover your actual damages or $250.00, whichever is greater, plus reasonable attorney fees up to $300.00 (“Item Pricing (Scanner Law)”, 2008, p. 1)
As I have heard of this happening, it is very hard to watch at all times for this and many times we decide not to follow through with taking an item back for the refund. I believe that Johnson Mega Mart needs to have a new training course on the state and federal laws that have to deal with adverting and scanning laws when dealing with customers. This company has already seen many stores close over violations that could have been avoided if they would have went by ethical laws that were put in place to protect the customers. As we have seen the cost of refunding money to customers, with having many stores open this could bankrupt a company fast as we have seen with stores that have already closed due to profit that has been loss because of faulty advertising and price scanning. Johnson Mart could look into a good marketing company to handle its adverting; researching the marketing adverting will pay off and will decrease any further law suits. Also keep managers and employees updated on the laws by having regular meetings. Make sure that the cashiers are paying better attention when scanning products.
BBB. (2008). Retrieved from https://odr.bbb.org/odrweb/public/getstarted.aspx
Item Pricing (Scanner Law). (2010). Retrieved July 30, 2010, from http://www.michigan.gov/ag/0,1607,7-164-34739_20942-134114–,00.html
STATEMENT OF POLICY REGARDING COMPARATIVE ADVERTISING. (August 13, 1979). Retrieved from http://www.ftc.gov/bcp/policystmt/ad-compare.htm