NEWARK – Apple Inc. (“Apple”) has agreed to install continuously available pricing information for iPhones, iPads, MacBooks, Apple Watches and other electronic devices on display in its New Jersey stores, to resolve an investigation by the Division of Consumer Affairs.
The new 4 ½ inch by 3 ½ inch “pricing wedges” will be placed on each table where these devices are offered for sale and will contain the total selling price of each type of device displayed on that table. The pricing wedges will supplement Apple’s existing in-store digital pricing system, which provides price information through apps and notifications that are launched from the devices themselves.
The Division alleged that Apple’s in-store digital pricing system violated New Jersey’s consumer protection laws because the pricing information was not continuously available for customers to view, making it necessary at times for customers to interact with a device or a sales representative to find how much the product costs.
“As phone prices rise, it’s more important than ever that consumers are able to easily compare prices between different models and make educated decisions on how to spend their money,” said Attorney General Christopher S. Porrino. “This settlement ensures that all Apple Store shoppers, even those unfamiliar with how to use the electronic devices, can easily determine how much an item costs without having to seek assistance from a salesperson.”
“We are pleased to have reached a resolution that honors New Jersey’s commitment to transparency in the marketplace while allowing Apple to continue offering its customers a tech-forward shopping experience,” said Sharon M. Joyce, Acting Director of the Division of Consumer Affairs.” “We welcome innovative marketing concepts in the retail industry as long as stores comply with the laws in place to protect consumers, especially when they’re shopping for expensive items like smart phones and computers.”
The settlement resolves allegations stemming from the Division’s inspection of all 12 Apple stores in New Jersey last year.
Investigators from the Division’s Office of Consumer Protection found that while accessories and other items in Apple stores were marked with traditional price tags, the iPhones, iPods, iPads, iMacs, MacBooks, and Apple Watches on display for customers to view and use were only priced digitally.
New Jersey’s Merchandise Pricing Statute, within the Consumer Fraud Act, requires prices to be plainly marked with a stamp, label, or sign on or near the merchandise. The purpose of the law is to ensure that consumers know the price of an item as they look at it, and for example are not required to interact with the device or a sales representative.
The Division alleged that Apple was in violation of these laws because the pricing information on display devices was not continuously visible to customers.
The Division alleged that iPhones, iPods, and iPads had a “pricing screen” that stayed up for five seconds after the device is woken from sleep mode but many devices did not display the “pricing screen” when approached because the device was already in an active state, rather than sleep mode.
Moreover, a “pricing app” located on device home screens was no more prominent than other applications installed on the devices; and a “pricing notification” alerting users about the availability of the pricing app expired quickly from the screen, or did not appear at all, the Division alleged.
Investigators also found that iMac desktop computers, and Macbook laptops had a static “price wallpaper, but many of the devices were running screensavers or applications that obscured the pricing, the Division alleged. Apple Watches had “pricing tablets” located on a separate table, not necessarily near the tables containing the display watches, the Division alleged.
During the inspections, the Division also found that none of the Apple Stores in New Jersey were in compliance with the Refund Policy Disclosure Act, which requires that a retailer’s refund policy be posted in at least one of the following locations: attached to the merchandise itself; affixed to each cash register or point of sale; in a place where it is clearly visible to the buyer from the cash register; or posted at each store entrance used by the public.
Apple, which did away with cash registers years ago in favor of hand-held devices that allow employees to transact sales from anywhere in its stores, has agreed to prominently display its refund policy on signs located at the public entrances to its stores.
Deputy Attorney General Russell M. Smith, Jr. in the Consumer Fraud Prosecution Section within the Division of Law represented the State in this matter.
Brittany H. Sokoloff, Esq., of Schiff Hardin LLP, represented Apple Inc. in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
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