The six-percent solution

State law requires retailers to sell their goods at a minimum of six percent above cost, unless a lower cost basis can be proven. This curious legislation is designated the Unfair Sales Act [pdf]; it was enacted in 1984 to replace a similar law dating to 1941. Even Matthew Yglesias finds it risible:

The theory of the case is that absent such legal protection a deep-pocketed national chain could come to town and operate at a loss until all the local competition is driven out of business. But real world discounting can serve many other purposes. A typical retail discounting strategy involves amazing bargains on a relatively small number of items, with the purpose of the bargain being to get shoppers in the door in the first place.

Now what deep-pocketed national chains can you think of? No, not them. The first-ever Sam’s Club, intended to beat local competition over the head, opened on SE 29th in, um, 1983.

Senator David Holt (R-OKC) is introducing a measure to repeal this law:

Holt said the outdated law puts Oklahomans at a competitive disadvantage with neighboring states where retailers can legally offer significant bargains for “Back-to-School” and holiday sales, including “Black Friday”, the biggest shopping day of the year. By forcing Oklahomans to leave the state to shop, retailers, consumers, and core government services are all negatively impacted.

One perhaps might wonder how much out-of-state shopping it takes to offset the $40 worth of gas it takes to get across the state line and back to Holt’s district on Oklahoma City’s northwest side.

Oh, and Holt’s Senate Bill 550 excludes fuel and prescription drugs, two of the heavier items in my budget. I’m sure he didn’t mean it personally.

1 comment

  1. fillyjonk »

    25 January 2013 · 2:52 pm

    I’m considerably closer to Texas than OKC is, and Texas has the added attraction of no sales tax on groceries. But I once calculated that I would need to buy in excess of $100 in groceries to make it worth it to me in gas. And that was when gas was cheaper than it is now.

    That said, there are some things I can find in the Sherman-area groceries that the local stores don’t carry. And Sherman has a largish bookstore, which we don’t have.

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