Apple agrees to use price tags in N.J. stores after state investigation

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iPhones, iPads and other Apple products used digital, on-screen pricing, which violated state consumer laws

Apple Inc. has agreed to change the way it puts prices on devices in their New Jersey stores after state investigators found the company violated consumer protection laws with their on-screen, digital pricing system.

As part of a consent order with New Jersey, the company will put "pricing wedges" - 4-1/2 inch by 3-1/2 inch signs - on each table where they sell iPhones, iPads, MacBooks, Apple Watches and other devices, the state Division of Consumer Affairs said in a statement Tuesday.

The wedges will supplement Apple's existing, digital system - which shows device prices on apps loaded on devices themselves, the state said.

In New Jersey stores, Apple's "pricing screen" was sometimes visible for just five seconds after the device was activated from sleep mode. But many devices did not display the price if it was already active, investigators found.

New Jersey's Merchandise Pricing Statute requires prices to be plainly marked with a stamp, label or sign on or near the merchandise. The law is aimed to ensure that consumers know the price of an item as they look at it, and need not have to ask a sales employee.

The company on Tuesday announced new iPhone models - including the iPhone X for $999 - as well as a new Apple Watch model.

The state investigation, conducted at all 12 Apple Stores in New Jersey in 2016, also alleged:

- a "pricing app" on device home screens was no more prominent than other apps

- iMac desktops and Macbook laptops had  static "price wallpaper," but many of the devices were running screen savers or applications that obscured pricing

- Apple Watches had "pricing tablets" located on a separate table, not necessarily near the tables displaying the watches

Investigators also found none of the 12 Apple stores were in compliance with the state's Refund Policy Disclosure Act, which requires that a retailer's refund policy be posted in at least one of the following locations:

- attached to the merchandise itself; on each cash register or point of sale; in a place clearly visible from the cash register; or posted at each public store entrance.

The state noted Apple stores no longer use cash registers, opting for mobile, hand-held devices to ring up sales. In the settlement, the company has also agreed to prominently display refund policies on signs at the store's public entrances.

"As phone prices rise, it's more important than ever that consumers are able to easily compare prices between different models and make educated decisions on how to spend their money," Attorney General Christopher S. Porrino said in a statement.

 "We welcome innovative marketing concepts in the retail industry as long as stores comply with the laws in place to protect consumers, especially when they're shopping for expensive items like smart phones and computers," Acting Director of the Division of Consumer Affairs Sharon M. Joyce, said.

Kevin Shea may be reached at kshea@njadvancemedia.com. Follow him on Twitter@kevintshea. Find NJ.com on Facebook.

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