Minimum Markup Makes Back-To-School Shoppers Pay More For Markers, Crayons And Other Supplies

The following first appeared at the MacIver Institute.

Back-to-school shopping in Wisconsin is once again more expensive than in neighboring states thanks to the state’s minimum markup law, which outlaws sale prices that are too low.

The minimum markup law, formally known as the Unfair Sales Act, bans retailers from selling merchandise below cost. The law, originally passed back in 1939, also requires a 9 percent price markup on specific items like alcohol, tobacco and gasoline.

Unfortunately, Wisconsinites are forced to pay for this archaic law that’s still on the books despite ongoing efforts to repeal it.

According to advertisements obtained by the MacIver Institute from late August, Walmart stores in Milwaukee charged higher prices for a number of back-to-school items compared with other Walmart stores in Minnesota, Iowa, and Michigan.

Families in Milwaukee buying basic items like composition books, markers, and crayons can expect to pay anywhere from 12 to 146 percent more than shoppers in St. Paul, Minn., Dubuque, Iowa, and Kalamazoo, Mich.

Some common school items cost on average 90 percent more in Milwaukee. Crayola Crayons posted the single biggest price variance, costing almost 150 percent more in Milwaukee than in cities in neighboring states.

Parents picking up a Composition book in St. Paul, for example, only paid 50 cents. That same Composition book cost 56 cents in Milwaukee. Crayola markers cost 97 cents in St. Paul, but thanks to the archaic minimum markup law, those same markers cost $1.97 in Milwaukee, a 103 percent difference.

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Walmart’s circulars boast that their great sale prices mean “$10 goes far,” but it goes a lot farther if you’re not shopping in Wisconsin. A basic shopping list would cost 90 percent more for a Milwaukee back-to-school shopper than in nearby states.

Shoppers in Illinois have previously enjoyed the same lower prices as other Midwestern states, as pointed out by the MacIver Institute last year. But this year, possibly thanks to the state’s recent draconian tax increases, families from Rockford to Chicago are joining Wisconsinites in paying inflated prices.

Efforts to repeal the antiquated minimum markup law stretch back several years.

In 2015, Sen. Leah Vukmir (R-Wauwatosa) and Rep. Jim Ott (R-Mequon) introduced a bill that would have eliminated the Unfair Sales Act. Unfortunately, the repeal bill did not receive even a public hearing in either house.

Another effort earlier this year by Rep. Dale Kooyenga (R-Brookfield) to reduce the minimum markup as part of a transportation funding package also fell flat, so the law remains on the books.

Vukmir, Ott, and other legislators haven’t given up. Earlier this year, they were joined by Sen. Dave Craig (R-Town of Vernon) and Rep. Dave Murphy (R-Greenville) in introducing a modified repeal bill.

This latest effort to relieve Wisconsinites from the burden of higher prices, however, has received the same silent treatment as previous repeal efforts.

Even though minimum markup repeal has hit a wall in the Legislature, a 2015 poll found that Wisconsinites are tired of paying higher prices and want the law taken off the books. The poll was conducted by reputable research firm Public Opinion Strategies and found that 80 percent of respondents had an unfavorable view of the minimum markup law when told “Wisconsin residents are required to pay more for many on-sale items than residents in neighboring states simply because of this 75-year-old law.”

Wisconsinites were just as angry when told that “the law forbids retailers from selling to consumers below cost and also requires that gasoline retailers sell gas to consumers with a minimum 9 percent markup, meaning Wisconsin drivers have to pay more for gas here than drivers do in other states.”

Some retailers have used the law to file complaints with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) against competitors who were offering items for too low of a price. In 2015, MacIver first reported on numerous complaints filed against Meijer, a privately owned Michigan-based grocery and supercenter chain of stores with more than 200 locations nationwide, as it made its first foray into the Wisconsin market.

The minimum markup law also makes illegal in Wisconsin many of the discounts received on popular national bargain hunting days like “Black Friday” or “Amazon Prime Day,” which in Wisconsin could better be called “Amazon Crime Day.”

With repeal efforts on the rocks once again, bargain hunters should beware: Wisconsin’s Price Police remain on the prowl.

A Dire Warning From MacIver

The MacIver Institute issued a somber warning to Wisconsinites today who might think their Black Friday shopping is an innocent expression of consumerism and a simple desire to get good deals.

Alas, in Wisconsin, we have a “minimum markup law” that makes good deals illegal. So after you trample your neighbors and shove innocents out of the way to snag that last sale-priced HDTV, keep in mind…you might be taking part in a statewide crime spree:

As the holiday shopping season draws rapidly near, the John K. MacIver Institute for Public Policy is once again out with its yearly public service reminder that low, low, low prices are still illegal here in Wisconsin thanks to our antiquated Minimum Markup law. Wisconsinites need to be vigilant as they shop to avoid illegally low prices on Black Friday, Cyber Monday and, well, just about any other day of the year here in the Badger State.

Wisconsinites are warned to avoid those stores with a reputation for trying to provide their customers with low prices – Walmart, Menard’s, Woodman’s, Meijer, Best Buy, Kohl’s, Target, Farm and Fleet, Fleet Farm, Kmart, Home Depot, Michaels, Gander Mountain, Amazon, Northern Tool, Macy’s, Cabela’s, Toys-R-Us, Lowe’s and frankly just about any retail establishment open on Friday or any store where you can purchase merchandise, wares, or some type of good, any type of good.

Brett Healy, President of the MacIver Institute, noted that these retailers are particularly notorious for offering deals. “Just look at the Black Friday Doorbuster deals they are offering. Those prices are crazy cheap, they must be illegal,” Healy said.

Wisconsin’s Unfair Sales Act – otherwise known as the minimum markup law – was first enacted way back in 1939. The law essentially makes it illegal for retailers and wholesalers to sell merchandise at a steep discount. The law also mandates that gasoline and other certain products be marked up at least 9.18 percent above the wholesale cost.

“We cannot live in a state where regular Wisconsinites can buy a 40″ 4K smart TV for just $299.99,” commented Healy. “What kind of society are we where the working class and the elites can all buy the same high-end, top-of-the-line television set for less than $300??!! Thankfully, Wisconsin’s Minimum Markup law makes this sort of economic justice illegal.”

In August, the MacIver Institute obtained advertisements from Walmarts in the Chicago, Milwaukee, and Minneapolis areas. On school supplies, Wisconsin consumers pay up to 148 percent more than Illinoisans or Minnesotans.

And a recent poll found that 56 percent of likely voters in Wisconsin support repealing the minimum markup law. Support for repeal increased to 76 percent when the voters learned more about the law.

Despite the overwhelming public opposition to the law, Healy reminded Wisconsinites that low prices are still illegal and warned shoppers to be careful while shopping for their Thanksgiving dinner and for deals on Black Friday.

“If you think you might be the victim of a great deal on that Milwaukee Tool M18 Fuel with one-key 1/2″ Hammer Drill you’ve always wanted, or if you think your Wisconsin cranberries are suspiciously cheap, I urge you to immediately call the State of Wisconsin Price Police at 1-800-High-Prices,” Healy said.

“I have been told by insider sources that the Wisconsin Price Police will have operators standing by around-the-clock to take your complaints about Black Friday sale prices, doorbusters, buy-one, get-one-free offers, six-hour price breaks, or any other type of diabolical good deal. Once the government bureaucrats have logged your complaint, written a consumer fraud ticket in triplicate and checked to make sure this depression-era law is still on the books, an undercover bargain cop will be immediately dispatched post-haste to your location to apprehend the penny-pinching scofflaws.”

“We can end this scourge of low prices that has plagued Wisconsin for decades,” Healy continued. “But my fellow cheeseheads must be brave and resist the temptation to take advantage of a good deal. Even though frugality is a part of our DNA here in Wisconsin, if we band together, we can all pay higher prices once again like the Unfair Sales Act always intended. Evil corporations should be forced to charge us more – low prices are jeopardizing our future and our children’s future.”

Read the original satirical post here.