Israel Steps Up Enforcement on Retail Price Marking Violations

The Ministry of the Economy’s wide-scale enforcement campaign launched last weekend in branches of supermarket chains throughout the country, found violations of the obligation to mark prices in all of the branches that were inspected. The violations included products with no price tags, no clear signage on shelves concerning special discounts, and even improper labeling of price-controlled products. The Consumer Protection and Fair Trade Authority announced that, in addition to enforcing the obligation to mark product prices, it will also focus on ensuring that the checkout price at the cash register matches the price tags on products, as well as on the accuracy of product weights.

It is important to emphasize that every violation of the obligation to mark product prices could result in a fine of up to ILS 25,000. Dozens of violations were already found at each branch inspected by the enforcement authorities so far, which could result in the imposition of heavy fines. Repeated violations of the Consumer Protection Law could lead to substantial financial sanctions reaching hundreds of thousands of shekels. The Consumer Protection Authority announced that, in the instance of particularly egregious violations, it may also consider using the most severe enforcement means at its disposal – the filing of criminal indictments that could result in incarceration of offenders.

Moreover, violations of the obligation to mark product prices could also result in private lawsuits or class actions against business owners claiming compensation at enormous sums, and could lead to damages that are not limited to the legal sphere, such as severe damage to the business owner’s reputation, to loss of consumers’ trust due to their expectations of fairness and transparency when they shop, and to their negative shopping experience.

The Ministry of the Economy and the Consumer Protection and Fair Trade Authority have made it clear that they will intensify their enforcement of product marking with additional inspections and additional teams to enforce them. At this stage, enforcement is focusing on retail food chains, but the clamp down operation can be expected to expand to other types of retail businesses.

What should I do now?

It is important to emphasize that business owners that take action to ensure that they are complying with the provisions of the Consumer Protection Law – especially the obligation to mark product prices – will avoid superfluous legal proceedings in the future leading to the imposition of heavy volumes of payments of financial sanctions and compensation to consumers, and even to criminal indictments.

Accordingly, we recommend that business owners should take the following measures:

1. First, internalize that this is an urgent matter requiring the attention of business managers.
2. Implement internal procedures addressing the marking of product prices and ensuring compliance with the obligation to mark product prices according to the provisions of the Consumer Protection Law.
3. Immediately ascertain that all products have price tags as required and that signage on shelves concerning special discounts is clear.
4. Ensure that branch managers and staff trained in affixing prices on products are aware of their responsibility in this regard, and supervise the implementation of the procedure in branches on an ongoing basis.

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