Last month, the National Development and Reform Commission (NDRC) fined three Carrefour stores in Shanghai, three in Hunan province, and two in Yunnan province up to 500,000 yuan each for overcharging customers. Walmart was also caught using illegal pricing methods.
According to a statement on the NDRC's website, there are four main ways the stores were cheating customers:
One method is by stating a fake original price when advertising sale items. The Carrefour Xinmin store in Changchun in northeastern China's Jilin Province sold men's underwear for 50.70 yuan,claiming the product was originally priced at 169 yuan when, in fact the actual original price was 119 yuan.
The second method is by attracting customers by advertising low prices, but charging more than the advertised price. A teapot should have cost 36.8 yuan at the Carrefour Nanxiang store in Shanghai, but a cashier rung up a price of 49 yuan.
The third method is by offering a fake promotion. Carrefour promoted low discount prices in Kunming City, but when customers went to pay for promoted goods, they were charged the original price instead of the discounted price advertised.
The fourth method is by using misleading prices. In one Carrefour in Kunming, the price on a bag of shredded squid appeared to be 13.8 yuan, due to the use of a large font to write the "13", and a small font to write the "8"; in reality, the price of the bag was 138 yuan.
Following the statement, 11 Carrefour stores in six cities were fined 500,000 yuan each.
Carrefour and Wal-Mart apologized to customers after being blacklisted, and Carrefour China has promised customers it would provide refunds worth five times the difference between the advertised prices and incorrect prices charged.
Carrefour China said in an interview with Xinhua News on Jan 30 that the company has established short-term and long-term measures to address the issue, including setting up a group to conduct wide scale, frequent internal price inspections.
But the scandal is far from over. Over the past few days there have been complaints about Carrefour branches in several cities such as Xiamen and Guiyang over the same issue.
CCTV has mentioned that the apologies provided by Carrefour were not sincere enough.
Why do these type of problems keep emerging and why in China? Beijing Times commenter, Xun Lifan, expressed his opinion on the matter:
Different strategies have developed due to the business environment in China. Many foreign-owned companies operating in China are used to preferential policies provided by the Chinese government, and lack serious domestic competitors which makes them too arrogant to respect their customers as much as they should. Additionally, the vulnerable position of consumers makes it difficult to protect them, which encouraged the two big companies to take their business operations to extreme levels.
From this perspective, besides punishing the two companies, perhaps the government needs to tighten supervision and set up a system for regulation and supervision to protect consumers.
Links and Sources
Beijing Times: 徐立凡：家乐福沃尔玛一到中国就变坏？
Xinhua News: 央视称家乐福道歉声明看到傲慢未见诚意
Beijing News: 家乐福沃尔玛承诺执行5倍差额赔偿
This brief was edited by Rose Scobie