Confusing your customers can be good for business

What Avanza Supermarkets gives you on sale prices in the aisles, it takes away in the fine print at the register.

Fine print on circulars (see the top right corner below) and shelf price tags says “plus 10% at the register.” What does that mean? It’s perniciously vague.

The answer is at the register, where receipts show a “10% plus” line item that adds that money back onto your bill (see below).

A local news network reported that most people don’t notice the fine print or the mark-up on the receipt. Avanza defended itself, asserting that they fully disclose the plus-10% system to shoppers. And besides, other chains like Elrod’s in Texas use this pricing system too (see below).

The scheme is certainly built on two shopper insights: people are lured by low prices, and people don’t always read the fine print. But it smells like deceptive marketing aimed at low-income and Hispanic segments. Companies are always trying to find a way to tip the balance of power in their favor with customers. But is this going too far? I think it stinks.