Nearly three years after consumer groups first raised public awareness about the issue, and more than two years after lawmakers first began discussing legislation to address it, a California city has now become the first jurisdiction in the country to pass an ordinance regulating how “digital-only” grocery deals are advertised and offered. It now awaits the mayor’s expected signature, after which it will take effect in 90 days.
And yet, it remains unclear exactly what the measure will regulate and what will be required of retailers. And with three months to sort it out before it could officially be on the books, the clock is ticking.
No changes were made to the ordinance between the time it was first approved three weeks ago, and its second reading today, after which it earned final council approval. As written, the ordinance mandates that “any grocery store that offers digital discounts to consumers for the purchase of goods must make physical coupons for the digital price available to consumers upon request,” with “digital discounts” defined as any form of coupon, rebate or price reduction available only online.
Retailers and promotions providers argued that the ordinance is far too broad, and could force them to provide paper versions of hundreds of individual digital manufacturer’s coupons and give away targeted discounts to everyone, which could be difficult if not impossible, and could force them to end digital coupon programs and loyalty programs altogether as the only realistic way to comply.
Before passing the measure with a unanimous vote, council members promised to address those concerns.
“I’m fully committed to making sure, before it goes into effect, that we will make the changes necessary,” ordinance cosponsor Marni von Wilpert pledged. “I’ve heard from folks about the definition of ‘digital discount,’ needing to differentiate between digital manufacturer’s coupons and grocery store coupons. We’re happy to work on that in bringing a resolution.”
“I look forward to working with the grocers and the retailers and the chamber and other stakeholders,” councilmember Stephen Whitburn echoed. “We certainly do not want to see digital coupons go away altogether in the city of San Diego.”
The ordinance’s sponsor, Sean Elo-Rivera, defended his measure, but was open to making changes. “I think we’ve been extremely clear about the intent of this policy,” he said. But “I’m looking forward to cleaning up ambiguity,” he clarified. “(I’m) happy to clean things up, I want our policies to be as clear as possible. What I don’t like is what I feel like are pretty bad-faith arguments being made by some, not by all, that there wasn’t any willingness to work with industry on this.”
Elo-Rivera again mentioned that he first publicly announced his intent to introduce the ordinance last October, and held a public committee hearing on the measure. But many local retailers and their representatives scrambled to register their opposition to the ordinance as written, just ahead of the full council vote.
California Grocers Association representative Tim James expressed to the council his “continued concerns regarding the language in the grocery discount ordinance. As currently written, the ordinance will be operationally impossible to implement,” which would “make the easiest path to compliance for a grocer to not offer or accept coupons in the City of San Diego.”
In a statement to Coupons in the News, Association for Coupons & Promotions Executive Director John Morgan urged greater cooperation between the council and the businesses impacted. “With input from industry, we believe there’s a path to either craft an ordinance that is workable for retailers and manufacturers — or to pursue industry-led solutions that expand consumer access without the need for legislation.” Ultimately, “there is a shared purpose,” he continued: “enable access, prevent unintended consequences, and preserve savings opportunities for San Diego shoppers.”
Even a fellow council member acknowledged the process up to this point was not ideal. It “could have been a little bit smoother,” Jennifer Campbell said, “because when crafting good policy, I think the government should call in all key stakeholders to be part of a conversation.” Before voting to approve the ordinance, she admitted she “was thinking of voting no. But now I understand that it will be looked at, and time will be given so that equal treatment can be provided to all customers and with reasonableness for businesses.”
If and when the mayor signs it, the ordinance will take effect in midsummer. Even if it is revised to ensure it only applies to advertised discounts that are only available digitally – and not to every available digital coupon and loyalty offer – it will still be the first of its kind in the country.
And that, the measure’s main backer believes, would be a victory in itself. “We will… make this an even tighter policy in the months to come,” Elo-Rivera said. However the final version reads, he continued, “today, San Diego is going to take a step forward in being a place that consumers will know that they have the most accurate and transparent grocery pricing of any community in this region and the country.”
Now the behind-the-scenes work begins, to ensure the ordinance will have its desired effect of making digital deals more accessible for the digitally-disconnected, while avoiding the undesired effect of eliminating digital discounts for all. Today marked a significant step forward, for better or worse – the next few months will determine where that step will ultimately lead.
Image source: Giant Food
