Same Size Can but with More Profit

So, with costs going up and profits going down, what does a food manufacturer do? Simple, trick consumers into thinking they are getting just as much today as they did yesterday when they go to the grocery store. But how do we do it, asks the CEO, CFO and the Board of Directors? Well, says a voice in the back of the room, how about we just put less pepper in the package? Genius, shouts the entire room, s they envision their next bonus payment!

And so it goes. Profits stay high, the fat guys get fatter, and the everyday folks in the grocery store don't even realize what is happening to them. At least maybe not until every food product starts doing it. And now they are.

All of this came to the forefront (again) in a front page article in the Business section of the June 12 Wall Street Journal. The entire article is well worth the read, so you don't waste your money on big business rip offs. Consumer Reports reported on its investigation of these deceptive practices a few years ago but obviously things have only gotten worse as Big Business has continued to find ways to sneak around the law's prohibitions.

You need to be aware of this grocery store deception and to be ready to do something about it too.

We don't know where it started but McCormick's pepper tins are among the latest to take the weight out of their same-size tin package so they can keep their profits high. Same size tin on the shelf at your grocery store. Just a lot less pepper inside. One fourth of the original content has been cut out and in tiny print on the bottom edge of the can the new much-less content amount is printed, 3 ounces now where it was 4.

It's like a 25% price increase that you didn't even know you were paying. In the food packaging business this deception is called "weight-out" or "slack fill" apparently by those who are beginning to do it regularly. We call it cheating.

News programs noticed the narrowing of toilet paper rolls, followed by the shrinking size of some cereal boxes, but up to now there was usually some noticeable size difference in the package itself that would tip off the consumer that they were getting less than when they shopped yesterday. Now we are seeing some food companies getting deceptive by simply keeping the food container-package the same size and just cut back on how much product is put on it.

Well it turns out the Federal Trade Commission has some federal regulations that makes deceptive packaging illegal and there are only a couple ways around deceptive packaging laws. One is the unavoidable settling of the food items into the bottom of the package - think crackers in a box for example. Another is to protect the food from damage in transit - think chips for example.

Is Big Business Cheating You at the Grocery Store?

And then there are those companies who do it just to protect their profit in a way the consume has less chance of finding out about. Feel like complaining to McCormick about this? Click here and do it! Maybe it will make them think twice before doing it to their other grocery store products.

Better yet, the FTC is looking at rewriting its packaging regulations and is inviting you to tell it what you think - you can do that by clicking here - so give them a piece of your mind if you want to stop this kind of consumer fraud.

Time did a nice article online about the ten common ways that companies trick you into spending more on their products.

So what can you do? You can stop them. You can let them know you don't appreciate being ripped off by sneaky sales gimmicks that are designed to see if you are being careful every time you go to the grocery store.

Every state has a "Udap" law that makes it illegal for any company, anywhere, to do anything that is unfair or deceptive to a consumer - and that includes the use of deceptive advertising and sales gimmicks that can rip you off. And, best of all, many of these Udap laws say that a violation of the federal law against unfair and deceptive acts is also a violation of the state law. So if you see an unfair or deceptive sales tactic that costs you money, these laws not only give you the right to stop it, but most of them give you the right to make the company pay you for doing so and, on top of that, they can be liable for any attorney fees too.

Big Business will be fair and honest, it seems, when you make it less profitable for them to be unfair and deceptive. So when you go shopping, be careful and don't let them trick you into wasting your money.

Arbitration sucks, we've said it before and we'll say it again. Arbitration sucks. 

But whatever you think about it, in Ohio a binding mandatory arbitration clause can not be used to take away a consumer's rights under Ohio's Udap law, the Ohio Consumer Sales Practices Act. Still, more and more arbitration clauses are trying to not only take away a consumer's right to go to court, but to also change the laws they can use.

Ohio's Udap law, the CSPA, makes it illegal for any merchant to do anything that is "unfair or deceptive" (the words in the law) to a consumer. And if they do, then the consumer may be able to recover triple their actual damages, attorney fees, and up to $5,000 in non economic damages for aggravation and inconvenience, etc. Car dealers hate this law.

Its no wonder then that Autos Direct, a Cleveland area internet-based car dealer, was sticking mandatory and binding arbitration clauses in its sales paperwork with consumers. But it went one step further and added a sentence that said "The non-prevailing party shall pay, and the arbitrators shall award the prevailing party's arbitration costs and expenses, including reasonable attorney's fees." Lawyers call that a "loser pays" clause and it means that if you are going to sue the car dealer then you sure better win or they might go after you to make you pay their attorney fees. But that's not what the the law in Ohio says.

In other words, car dealers like Autos Direct not only wanted you to not be able to go into a courtroom where the public can find out what they did to you, but they also didn't want you to be able to use consumer protection laws against them at all. Ah, c'mon, guys, don't you think that's a little too much?

Well the Eighth District Court of Appeals thought so, when it decided Tamara Hedeen v Autos Direct Online, Inc. on Sept 25, 2014, and tossed out their arb clause.

 Attorney Beth Wells, with Burdge Law Office in Dayton, Ohio, reports that the appellate court ruled that "where a consumer's CSPA (Ohio's Udap law) claim is subject to binding arbitration, limitations on a consumer's right should not be allowed by a private arbitration forum." A couple of pages later in the court decision, the appellate judges threw out the arbitration clause entirely and held that Ms Hedeen now has the right to go to court.

In Hadeen's case, the court noted, she had bought a used 2011 Mercedes online for $28,000 and later discovered that it had sustained over $20,000 in undisclosed damage and over $7,000 of the damage had never been repaired. It's things like that which explain why some car dealers don't want consumers to go to court at all. Hadeen filed her case against the dealership with claims that they had committed unfair and deceptive acts in violation of Ohio's Udap law and Ohio's little-known Motor Vehicle Sales Rule, OAC 109:4-3-109.

A public court, where the public can see what is happening in our Justice system - that's what Justice should be all about. A Big Round of Applause to Attorney Beth Wells on a job well done.