Tesco's betrayal of the consumer's trust

Those of us who felt we could trust our local supermarket were breathtakingly naive - but we won't be caught out again

When Carmel Foley, the Director of Consumer Affairs, called Tesco to her office yesterday to account for its admission of overcharging, only the Irish management for the Republic attended. The British parent company and its British 32-county Tesco manager stayed clear - which somehow makes the betrayal seem even worse.

Foley says she hasn't ruled out prosecutions and is sending investigators into all the supermarkets on Monday. Mary Harney is understood to be furious and wants Tesco to be seen to pay for its blunder.

Consumers, meanwhile, are feeling bruised, because the Tesco overcharging story isn't just a matter of money, it is a disappointing betrayal of trust.

As consumers, we spend 25 per cent of our income on food, an expenditure of £5 billion a year. If we shop in Tesco, where a family may easily spend £200 a week, we have loyalty cards and collect points for our loyalty. In the end of the day, Tesco was not loyal to us.

"I don't know about you, but I rarely check the prices of things. I assume that the supermarket will do the right thing by me, and this did breach that trust," says Tesco's spokeswoman, Sarah Morris, articulating exactly what the rest of us were thinking this week.

The really amazing thing is that on Wednesday, 24 hours after Tesco admitted problems with its pricing systems, it was still overcharging .

At Bloomfield's Tesco in Dun Laoghaire, Dublin, I was overcharged a total of 50p for three items, two toothbrushes and an enchilada, on a family shopping bill of £122. I was charged £1.99 each for toothbrushes priced at £1.79 on the shelf, and I was charged £2.09 for an enchilada meal which said £1.99 on the packet.

Fifty pence may not seem like much, but when you look at the whole enchilada you start to feel yourself bristling. An overcharge of 50p on £122 is 0.03 per cent, which if applied to all Tesco's one million customer transactions a week amounts to £500,000 a week or £26 million a year.

To calculate it another way, Tesco makes £800 million a year. If it overcharged each shopper by as little as 0.03 per cent, this oversight would amount to £2.4 million a year, a tidy sum that would buy a considerable number of computers for schools.

Morris said that I was overcharged because the till receipt was correct, and the price labels were incorrect. When I selected the toothbrushes from the shelf, there was a price label accurately describing them which clearly stated £1.79 each. Tesco Bloomfield's personnel agreed with me that the label said £1.79 when it refunded my money.

"I don't understand why people are still shopping here," muttered one of the staff.

Sarah Morris, however, insisted yesterday that the store was only being public relations-conscious in admitting the mistake and that the error was actually mine. She said the label which appeared to describe the toothbrushes as costing £1.79 was a label for a similar product which had been incorrectly moved beneath a display of £1.99 toothbrushes. I had therefore mistakenly associated the toothbrush with the label beneath it.

I don't know about you, but I have trouble swallowing that particular enchilada.

As for the enchilada, it said £1.99 on the packet and I was charged £2.09. According to Sarah, the price actually was £2.09 and £1.99 was printed on the packet in error. This wasn't the first time that Tesco had displayed packages with British prices and charged more at the till, as was RGDATA's experience in the case of ready-prepared meals when it uncovered the extent of Tesco's overcharging.

"Our integrity checks have shown that by and large our system works, our prices are always correct, but what has been at issue in your particular case and in the cases RGDATA had the other day was that they are talking about packages with prices on the package or on the shelf that don't match the till receipt," said Morris.

WHATEVER way you want to dress it up, it still sounds like overcharging to me, and to the Director of Consumer Affairs, Carmel Foley, who when she heard my tale of being overcharged said: "My goodness, in any large supermarket there would be two or three glitches. Here [with Tesco], there's a pattern of much more."

I wasn't the only one to be overcharged following Tesco's apology on Tuesday. On Thursday, two days after Tesco admitted overcharging, the Director of Consumer Affairs was still receiving numerous consumer complaints that Tesco was continuing the practice.

Tesco fully refunded my money, but I'm not worried about two toothbrushes and an enchilada. What every Tesco shopper in the State wants to know is: how long has this been going on? Tesco said the problem started when it introduced a new computer system six months ago in November. The Director of Consumer Affairs has been keeping an active file since October.

We wouldn't have even got this far if it hadn't been for the diligence of those frugal Tesco shoppers who checked their bills and complained to RGDATA. You need an MBA to read a Tesco till receipt, so until the overcharging story broke, many people couldn't be bothered, especially in a buoyant economy where people aren't as concerned about an extra pound or two like they were 20 years ago.

Ninety eight per cent of people don't check their till receipt, according to Mike Campbell, director general of RGDATA, which broke the story. Spurred by complaints from Tesco customers who felt they were getting no satisfaction from the Office of Consumer Affairs, RGDATA went shopping at six Tesco supermarkets on Wednesday and Thursday, March 18th and 19th, where it spent a total of £400.

The overcharging ranged from £1 to £9 on a till receipt, an average of 3 per cent. Such overcharging, if carried through on the bills of the one million shoppers who visit Tesco each year, would amount to an extra profit of £24 million annually for Tesco. On the average family shopping bill, this overcharge would amount to an average of £4.50 a week, which may mean more to many families than £24 million would mean to Tesco.

If you are thinking, during this period of overcharging at Tesco, that if only you hadn't thrown away all your Tesco receipts you might have some chance of reclaiming your money, then think again. If you have a clubcard, you have kept all your receipts, in a manner of speaking. Tesco knows precisely every item which its 800,000 clubcard holders have bought since November 1998, the price, the brand and the date.

You have a right to this information, and to get it you simply have to ask Tesco in writing under Section 4 of the Data Protection Act. It must provide the information within 40 days and you must pay it a fee of £35.

On Wednesday Tesco denied it could provide these data. It only admitted to having the data and the capability to recall till receipts in detail after The Irish Times challenged it, by quoting from a document about Tesco plc's clubcard scheme, by the IGD Account Management Series, 1998.

This article describes the complex and detailed collation of data which the company can achieve through the ironically named "loyalty card" system. The clubcard enables "sophisticated direct mailing allowing different customer groups to be targeted with specific coupons" and the data can be used "to personalise offers to individual shoppers".

Clubcard members can be "segmented into life-stage groups based on a range of criteria . . . Coupons can be personalised, as the spending characteristics of young couples, vegetarians, young families and older families are seen as distinct and recognisable". With such a sophisticated data system in place for nearly six months, why didn't Tesco just admit this on Wednesday before The Irish Times confronted it with the IGD article?

Sarah Morris said she was learning as she went along. Perhaps Tesco needs to learn just how much Irish consumers will put up with.

Surely, with good will, Tesco could take the clubcard data for its 800,000 members, compare the prices paid to the prices listed on the shelves (which are barcoded and presumably available on computer software), and refund consumers their money.

Tesco says it cannot do this. Morris claims that Tesco does not have computer data for the prices listed on the shelves on particular dates, making the retrospective comparison of till receipts and shelf prices impossible. But surely there is something Tesco can do to ease the blow of the betrayal, even if it means awarding shoppers with a few extra clubcard points?

Every week 1.2 million households in the State go to Tesco do their shopping.

To be overcharged by 0.3 per cent, or even by .03 per cent, on such a huge proportion of the family budget without realising it makes you feel powerless and exploited: there are no other words for it. The friendly neighbourhood Tesco has turned out to be a mammoth money-grabbing corporation.

Because Tesco is British, there is even a faint scent of colonialisation in the air. With hindsight, those of us who felt we could trust our local supermarket were breathtakingly naive, but we won't be caught out again.

As one Tesco shopper with a young family living in Dundrum put it, "I noticed, before I knew about the overcharging, that my grocery bills were larger with Tesco than they had been with Quinnsworth. But with two babies pulling at me, I never had time to check the prices. I'm still shopping in Tesco because my older children are collecting the computer points, but as soon as that scheme is over, I'm never going back."