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The Accuracy of Scanned Prices

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  • Hardesty, David M.
  • Goodstein, Ronald C.
  • Grewal, Dhruv
  • Miyazaki, Anthony D.
  • Kopalle, Praveen

Abstract

Nearly all retailers use price scanning systems to process transactions quickly, and presumably, accurately. Inaccuracies in scanned prices have important implications for retailers in that undercharges may impact retail profitability while overcharges could result in negative consumer perceptions of retailers and continued legal action. Here, we investigate the overall State of accuracy of scanned prices and develop certain empirical generalizations. To do so, we begin with a review of what is known regarding the accuracy of scanned prices and conduct a reanalysis of FTC data and compare the results with those from more recent cross-sectional data from the State of Washington. We then conduct a thorough analysis of a large longitudinal price scanner data set, with 231,760 products screened over a 15-year period. We investigate accuracy across different retailer characteristics, merchandise locations, and promotional activities. Implications of these results for retailers are discussed.

Suggested Citation

  • Hardesty, David M. & Goodstein, Ronald C. & Grewal, Dhruv & Miyazaki, Anthony D. & Kopalle, Praveen, 2014. "The Accuracy of Scanned Prices," Journal of Retailing, Elsevier, vol. 90(2), pages 291-300.
    • Handle: RePEc:eee:jouret:v:90:y:2014:i:2:p:291-300
    DOI: 10.1016/j.jretai.2014.03.006
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    References listed on IDEAS

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    1. Mark Bergen & Daniel Levy & Sourav Ray & Paul H. Rubin & Benjamin Zeliger, 2008. "When Little Things Mean a Lot: On the Inefficiency of Item-Pricing Laws," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 209-250, May.
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    5. Talukdar, Debabrata & Gauri, Dinesh K. & Grewal, Dhruv, 2010. "An Empirical Analysis of the Extreme Cherry Picking Behavior of Consumers in the Frequently Purchased Goods Market," Journal of Retailing, Elsevier, vol. 86(4), pages 336-354.
    6. Shuba Srinivasan & Koen Pauwels & Dominique M. Hanssens & Marnik G. Dekimpe, 2004. "Do Promotions Benefit Manufacturers, Retailers, or Both?," Management Science, INFORMS, vol. 50(5), pages 617-629, May.
    7. Puccinelli, Nancy M. & Chandrashekaran, Rajesh & Grewal, Dhruv & Suri, Rajneesh, 2013. "Are Men Seduced by Red? The Effect of Red Versus Black Prices on Price Perceptions," Journal of Retailing, Elsevier, vol. 89(2), pages 115-125.
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    Cited by:

    1. Epstein, Leonardo D. & Inostroza-Quezada, Ignacio E. & Goodstein, Ronald C. & Choi, S. Chan, 2021. "Dynamic effects of store promotions on purchase conversion: Expanding technology applications with innovative analytics," Journal of Business Research, Elsevier, vol. 128(C), pages 279-289.
    2. Jean-Pierre I. Rest & Alan M. Sears & Li Miao & Lorna Wang, 2020. "A note on the future of personalized pricing: cause for concern," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(2), pages 113-118, April.

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