In a discussion of law reform concerning door-step selling, there is an argument that posting a no cold calling sticker does not mean expressing rejection of a cold calling.
The METI posted it on his interim report on 10th December 2007 in relation to the law reform. However, the METI’s argument is not consistent with the interpretation over a guidance about revised Commodity Futures Law.
Posting of no cold calling label in commodity futures trading
The law prohibits second solicitation in case a customer rejected solicitation by commodity trader (art. 214-5). The METI seems to consider that the expressing rejection of solicitation includes posting the sticker, therefore traders cannot solicit to consumers who post the sticker in their house.
Categories: cold calling · unfair trade practices
From Asahi Shimbun on 7th June 2008, the sales practice of cross-out practice will be ablolished:
Many major electric home appliance makers and some of the biggest retail chains in the business will scrap the common practice of showing crossed-out prices on price tags that promise “further discounts.” The Home Electric Appliances Fair Trade Conference, which includes electric appliance makers and large electronics goods retailers, plans to revise its rules at a general meeting in July. The move comes after the government’s Fair Trade Commission pointed out the practice was “lacking transparency and undesirable.”
The sales practices tends to confused consumers:
At a Tokyo shop in an area with a high concentration of electronics retailers, price tags on most televisions carried a printed price–the “original price.” Below, an attached tag listed a handwritten discounted sales price. On top of that was a sticker that read, “Further discounts available”–for those willing to haggle. At a rival store nearby, the situation was similar. Some prices were crossed out and the tag carried a sticker that said further discounts were available. The usual explanation from salespeople for the varied prices was that as prices sometimes change several times a day for popular items, reprinting price tags takes too much time.
However, it aims be done to avoid price wars, according to an industry insider.
If a store clearly states its final discount price, other stores will follow suit, dropping their prices accordingly. That would intensify price competition and lead to lower profits all-around.
Regulation
Act against Unjustifiable Premiums and Misleading Representations prohibit misleading representation on advertisement.
Article 4(Prohibition of misleading representations)
(1) No entrepreneur shall make such representation as provided for in any one of the following items in connection with transactions of goods or services which he supplies:
(i) Any representation by which the quality, standard or any other matter relating to the substance of goods or services are shown to general consumers to be much better than the actual one or much better than that of other entrepreneurs who are in a competitive relationship with the entrepreneur concerned contrary to the fact and thereby which tends to induce customers unjustly and to impede fair competition;
(ii) Any representation by which price or any other trade terms of goods or services will be misunderstood by general consumers to be much more favorable to the general consumers than the actual one or than those of other entrepreneurs who are in a competitive relationship with the entrepreneur concerned, and thereby which tends to induce customers unjustly and to impede fair competition; or
(iii) In addition to what are listed in the preceding two items, any representation by which any matter relating to transactions of goods or services is likely to be misunderstood by general consumers and which is designated by the Fair Trade Commission as such, finding it likely to induce customers unjustly and to
impede fair competition.
(2) The Fair Trade Commission may, where it finds it necessary in order to evaluate whether any representation falls under item (i) of the preceding paragraph, designate a period and require the entrepreneur concerned to submit data as reasonable grounds for the representation he has made. In such cases, if the entrepreneur fails to submit the data, the representation concerned shall be
deemed to fall under the said item for the purpose of applying the provisions of Article 6 (1) and (2).
The cross-out advertising practices seems not be bereach of the article whilst ambiguous price displays puzzle consumers. In other word, there may be nothing wrong with doing cross-out labeling.
However, If such price tags (with crossed-out prices and a ‘further discount available’ message) become the rule, eventually the whole concept of having price tags on goods in stores will become meaningless, the article introduces the comment of FTC’s officer.
Categories: unfair trade practices
