tv [untitled] August 3, 2014 6:00pm-6:31pm PDT
require registration for retail businesses that individually mark each item with the price in their store. and that's not something currently that san francisco has and might be something good to look into for the smaller businesses that have less item and then they just mark, mark their goods. it's less likely to [speaker not understood] consumers going into the store, everything is priced. so, just something to keep in mind. and retailers need to be certified every four years versus san francisco's every one year. and the cost structure for chicago is $250 for small stores, and small stores being stores that have three or fewer point of sale systems. and chicago says you must not overcharge 4% of the item that are scanned during inspection
whereas san francisco ha 2%. so, san francisco requires a 98% accuracy rating on inspection where chicago is 96%. and then online retailers, we looked at the larger retailers because they were the ones that created the need to establish this regulation. and our local ordinance here in san francisco explicitly cited california business and professions code 12 0 24.6 ~ and that states that no personal firm, corporation or association shall advertise, solicit or represent any means a product for sale or purchase if it isn't intend ited to entice consumer into a transaction different from that originally presented. and that's why we started looking into these larger entities that do business online. first, we looked at amazon, and
amazon, even if you add an item to your shopping cart, the price can fluctuate after you have added it. so, the question was does that -- does that entice a customer to add it to the cart to purchase the item and then the business changes that on the price that what originally represented. wal-mart says they cannot confirm price of an item until after order. and then apple reserves the right to change prices for products displayed on the apple site at any time and it reserves the right to correct pricing orders that may inadvertently occur. so, it seems like this could be hurtful to consumers. the prices can change without them knowing and some of these entities don't need to really do anything about it because they allow themselves that discretion. and also there is a national
conference on rates and measures. it is a not for profit corporation dedicated to developing and regulating united states standard for weights and measures. this was established in 1905. and we looked at the director of california division of measurement standards and it's [speaker not understood]. so, it might be good to contact her to direct some questions that might be relevant for the august 25th meeting that you guys will be having. and then we kind of looked at more questions moving forward, what should we delve into deeper to kind of see if, if this regulation is capturing the intent that it had when we first -- when it was first established. and some of these questions are what is the length of time between registration of a point of sale system and a small business to when it gets inspected. so, we received a few complaints about the fee that
these small businesses were receiving and that could be, in part, that they were not getting inspected. and the fee is supposed to be a fee to reimburse the inspection of that business. so, we kind of want to find out how long it's taking, taking the weights and measures of san francisco to go in and inspect those businesses. second is the regulation unfairly target brick and norte arby'snesses because they are tangible. ~ brick and mortar as i say, the larger entities that sell products online, they may be enticing customers to buy a price that can fluctuate. amazon, for example, when it can fluctuate when it's some somebody's shopping cart. so, we want to into that and if though large entities should be regulated. third, should smaller businesses that mark all of their item be exempt from registration fees. and as i said earlier, chicago does not require registration
of these businesses that mark all of their items in store. and then how much discretion does a local municipality in the application of the state law, what discussion if any at the national level is taking place regarding brick and mortar and online. and does the small business commission have additional questions that need to be answered for the final analysis. and that's all i have regarding the presentation. so, if you guys have any more questions to direct me, i'll do my best to be able to answer those. >> commissioners, do we have any questions? commissioner dwight. >> thanks for your presentation. very informative. my father's company made the first supermarket scanners. i'm very familiar with the -- why this legislation all came to be. in the early days the pricing database was largely manual, so, its was disconnected from
the database at the register. so, there was great concern you would see a price on the shelf. check out is different price higher, lower. the concern was you would be checked out at a higher price. in the flurry of activity at a check-out thing like supermarket, things are flying by so fast you don't realize it until you get home. heck with it. i thought it was supposed to be 69 cents a pound and it was 89 cents a pound. don't bother with t. today i think those databases are more tightly coupled at retail. so, i suspect that the differences are far less. and online, the price database directly feeds the shopping cart. so, the opportunity for a disconnect between the price that you see when you're seeing it online on your computer screen and the price you see at check out is much less likely to be different. furthermore, the frenzy of
activity is much less online. you're making very discrete choice. they're going into the shopping cart. amazon routinely informs you if something that is sitting in your cart for a long, long time, you actually get an e-mail that says prices of the following item have changed in your shopping cart because they have sales all the time and they are adjusting prices up and down due to all kinds of inputs. and, so, i think that generally speaking there is not so much abuse any longer. and, so, it's very interesting. i'm not quite sure, you know, how much need to be done in this area as technology moves forward because i think there's a lot of convergence in term of the databases and real-time pricing and all that kind of stuff, but very informative presentation. thank you very much. >> thank you. >> commissioners?
commissioner tour-sarkissian. >> i have a question. you mentioned prior to the meeting you noticed a lot of retails, retail stores did not know about the registration. in fact, you're surprised that many of them did not register and they were -- they were fined for not registering? >> there is a fine. if you look on the legislation online, it lists all the fines. i believe it's either 50 or $100 an infraction. if it's intentional, i believe that to be a misdemeanor. but it what most of the people working at the counters didn't really know about it, like i think safeway within the last couple years was one of the big businesses that got in trouble for charging -- overcharging for a lot of item in their store and now they offer a --
if they overcharge for one item that's over $5, or under $5, they give you that item for free. and if they overcharge an item that's over $5, they give you a $5 gift card. so, it's just like -- these people working the cash registers, looking into that, people are going to the store and know about that, they would ask for their gift card for $5 and they'd be like, no, we don't know what you're talking about. so, it's just kind of in store, they're not really sure -- whole foods is another business that got in trouble for -- i don't know what the settlement was, but they also were overcharging. and i think it was more weighing their meats and they overcharged a lot of customers and actually got in trouble for that. whereas safeway's fine was 2.25 million. that was the counties in and around san francisco that were paid that settlement -- excuse me.
yeah, so, a lot of people working in the stores don't know, don't know about it and i think you made a lot of great points with technology and how -- because the state and local level, all the definitions used by both, the state law and the local law, they're very similar. i think it's just a question of kind of the biggest issue i see is the smaller, the really small stores that list priceses on all of their items ~ and they just don't see why they should be paying the $75 fee for something that they're not really going to swindle a customer out of, out of an accurate price. >> just for an example, we were
contacted by a hair salon who had 10 products and they were required to pay the pos registration fee. so, i think, again, you know, the objective of this is to sort of take a look -- the definition has a pretty broad definition. what was an electronic transaction today versus three years ago versus, you know, 10 years ago when this law was initially enacted is very different. and, so, you know, what does that mean now? commissioner dwight, as you're saying, in terms of amazon and those folks online, if we think of the accurate pricing can happen there and there isn't a concern for consumer -- concern for the consumer, the enforced model entities should there not
be the same level of concern as the regulation is implied. commissioner dooley? >> that was what i wanted to bring up, we'd like to see more research and information on the impact on our small businesses that do mark our fee, i think that is probably the largest issue for us right now. so, i'd like to see more about how is that working out in chicago, you know, that's already been doing it and see where we can go with that. >> can you repeat that again, please? you'd like to see more research on? >> on the -- how the impact has been in chicago for exempting the small businesses that mark all their products and, you know, try to come up with some statistics on whether that's working and whether we could try to -- think we can implement something like that here in california or in san francisco. >> commissioner dwight? >> well, i have to say i what
quite surprised to find that there was a fee for point of sale technology. and i think -- i don't think there should be one. you know, i have a small retail store. we use -- so, you're a small retailer. you go buy quick books. you find out that there is a point of sale module. you go, that's cool, i can use that in my store, help me keep track of my inventory, keep track of commissions if i'm paying them to people, if i have a store that has item on commission, it helps me figure out, you know, whose item i sold and stuff like that, what vendor should get paid what. in fact, it says much about back of the house organization as it is about consumer facing pricing issues. and, so, you know, the one instinct would be, fine, i'm going to unplug the scanner, i'm not going to use the scanner. i still have to have everything
computerized. you'd be an idiot if you were keeping track of thing with a manual ledger today. so, do you say, oh, you have a date of basis of your item. you have technically a point of sale system whether you use a scanner or not. and, in fact, so, if you unplug the scanner then you're saying now i have to employ people to manually type in upc codes, right? because everything can be coded in the database and i'm not going to type out the description of every product. i want it to be consistent. so, i'm going to use numbers or alphanumerics or codes. frankly, i think that it's just another way that we're taxing businesses, especially small businesses for things that are so routine today and actually things that you would not be a small business person if you didn't employ these technologies. and i think it's a disservice to small business. i think it's a disservice to innovation because it says, oh,
another innovation, another opportunity to tax. and taxation, fear of taxation should not be an impediment to innovation. and fear of taxation should not be an impediment to making our businesses more efficient so that we can deal with things like rising minimum wages, rising real estate prices and increases in other taxes that are perhaps more legit. and, so, and it gives rise to a government that when it starts employing people to go out and see if people are violating these ridiculous things, right, rather than focusing on the major tax he that we already have and kind of accept the taxes we should be charging. so, you know, i think that simply taxing something that looks at a database and reports a price is an absurd thing when there's weights and measures and things like that involved,
maybe it's more -- certainly there might be a certification. if there is a certification, it needs to be paid for. i have a real problem with this and i think we should be looking at other municipalities that have either avoided this or minimized it. and any fee should strictly pay for essential, you know, inspection if, in fact, we need inspection. >> commissioner riley? >> yes, thank you. do you have a clear definition of point of sale? because when we were [speaker not understood] legislation four years ago, we were thinking about safeway and key stores, we weren't thinking about small mom and pop grocery stores. he >> well, from what i got was the -- i think its was the second or third slide that point of sale stations, which is the point of sale systems,
shall include a [speaker not understood] that uses universal product code scanner, price look-up codes r, or any other system that relies on retrieval of of electronically stored information to complete a transaction ~ and that's where it gets broad, i guess, on that last point because it just -- yeah, what is that looking at the electronically stored information. but that's the definition it gives at the state level and the local level. so, that's what we have to work with. >> it doesn't include restaurants, too, right? >> yeah. >> because now when you go to restaurant, they key in whatever you order and [speaker not understood], and at the end when you check out and they punch the total, so, that would include all the small restaurants as well. >> even square, i guess the
square technology of -- you have to have look-up the price on your ipad and they have a connector and they swipe your credit card. so, i don't know if they can go around -- i'm sure they wouldn't want to go around inspecting each individual person that has an ipad using square technology. so, it makes it a little bit broad, a little bit tough to figure out everything that they are trying to include in the definition. >> and maybe that's one thing we should look at for the future. >> commissioner dwight? >> well, i mean, i suppose you could just say, well, i'm not using it as a point of sale device. i'm using it it as an inventory control device because that same scanner is used in the warehouse or on the shelf when i do my inventory, i'm going to go around and scan everything. i am not involved in a retail transaction. i'm merely involved in the, in the act of counting and accounting for inventory. and, so, if my quote-unquote
point of sale activity is strictly to track inventory, you know, or is for purposes of managing inventory and incidentally i get a total of the transaction, you know, maybe there is a work around there of some kind. i just -- it's mind boggling that point of sale technology -- that the use of technology to make your business more efficient like this and control your inventory is subject to a tax. >> i would agree. my comment, i had a question for you because i agree with commissioner dwight as well. i think it can be very difficult. and commissioner riley made a good point about defining what that component is. with that being said, a pos system being inspected now in san francisco? i know the weight machines,
we're talking pos as well right now? and to commissioner tour-sarkissian's point, some of them don't even know. is that being caught on a personal and secure taxes as far as the equipment? is that completely separate or is that, again, another tax? or registration fee, do we know? >> so, the department of public health under the weights and measures is the one that licenses the pos system. it doesn't impact them. >> so, when the commission first heard this, and i think -- and i think commissioner dwight -- commissioner dooley was on the commission at the time. when we first heard it, the idea was i think they're first going to roll it out to the larger businesses and then start rolling it out to the smaller business he.
and, so, i'm not sure if i'm answering your question. if i'm not fully answering it, let me know. >> if you have a retail license, that's going to be a trigger and if you're a restaurant that's going to be a trigger because they know eureffect i havely a food -- >> and i think -- and they're getting information. so, if you purchase a pos system or maybe inventory system then those -- they can get the names of the businesses that are using those inventory systems. i think that's how they find out for some, you know -- >> i don't know how they'd find out. you can buy a pos system from amazon. there's no government registration -- [multiple voices] >> in terms of we can ask the department of public health. i mean, i've given them those list of questions to present to you but reiterated. so, but again, it's been in this last year that we've been contacted by small businesses that give you the example of the hair salon. >> right.
>> she use he a certain pos system and, so, i think that's common in that industry. she has 10 products. you know, there is not a high use of inventory for her to keep track of and for her customers to keep track of in terms of what the price of the goods are. we're contacted by a couple retailers in hayes valley. so, you know, it's a question of we're looking at -- as a relatively, i'd say a relatively new regulation. so, it is completely separate from your unsecured property tax. >> okay, all right, thank you. any other commissioners? questions? comments? thank you, [speaker not understood]. for your presentation, well done. >> thanks. >> thank you. >> is there any public comment?
seeing none, commissioner? next item. >> next item, commissioners, is the director's report and in your packet is the director's report. there is not anything new to report in terms of city programs, initiatives. i would like to let you know that the small business leadership group that meets quarterly with the mayor has been meeting with the contract monitoring division and the office of contract administration, and today we met -- i joined them meeting with ben rosenfield and naomi kelly to take a look at ways to increase and improve local purchasing with small businesses. and i do know that there is -- i think supervisor david chiu is looking at doing some
revisions to the 14 b ordinance and also the mayor and naomi kelly reported back a couple months ago, have done -- have conducted some outreach workshops to lbes to get their recommendations on ways of which to improve and make it easier for lbes, sbes to do business with the city. the formula retail, so, the planning heard both of the items at the thursday, july 17th meeting. the planning commission is going to continue to support the planning department's recommendations around the number of entities that will trigger formula retail. and at this point i think there will be two kind of parallel pieces of legislation for the board of supervisors, then, to finally bring together.
the planning department formally introduced their ordinance last week and, so, technically this should come back before the commission and i will, you know, let me know if you'd like to hear it again. if you don't, you don't have to. but that's to decide in the next week or two. and then i have a list of recently introduced legislation that should be coming before you at our next commission meeting and then a status of different pieces of legislation that was heard by the commission, though the commission did not hear the interim zoning controls around landmark buildings and pdr. but since this was the topic thats was brought up as a matter of concern, just to let you know that that item, the mayor has signed that into law last week, i believe. and then lastly, i just want to report that we now have our
10th -- our second 10th staff member [speaker not understood], and she started last tuesday. so, as of today we have now opened the office back to full service counter hours monday through friday, 8:00 to 5:00. and there's no updates on any particular workshops or presentation that staff is conducting. with that, that's it for now. >> thank you, regina. any questions for regina? [speaker not understood]. next item. >> next item is the president's report, but we do not have president adams here. so, that will continue on to the next meeting. item number 7 is the vice president's report. >> nothing to report at this time. >> item number 8, commissioners
reports. >> commissioners? >> [speaker not understood]. >> okay, next item. >> item number 9, general public comment. this allows members of the public to comment generally on all matters within the commission's purview, and suggest new agenda items for the commission's future consideration. >> is there any member of the public that would like to make a general comment? seeing none. >> we are now on item number 10, new business. this allows commissioners to introduce new agenda items for future consideration by the commission. >> commissioner dooley. >> i'd like to bring up a situation at the san francisco flower market. as you know, i am a florist and there is concern among the tenants of the flower market and the florist community in terms of ensuring that there would be no interruption of this business which is not only a $90 million a year pdr, but
that also doesn't include the at least 500 small businesses that are florists in this town that rely on an uninterrupted flow of goods and services in someplace that can be reached conveniently. so, both vendors and florists have asked me to bring this to our attention in terms of working with the -- with them to make sure that there are a number of possibilities that could come up, relocating people all to one area, is the type of industry that needs to have everyone in the same place. they are concerned about rents being raised once the new office building is in. they're concerned about lack of parking. they're concerned about construction interruptions. and, so, you know, this is a major small business industry and i feel very strongly that
we need to get together with the tenants and florists to work out what the possible mitigationses are going to be and make sure that this goes forward in a way that does not impact this major pdr business in san francisco. we're the second-largest flower market in california and one of the largest in the united states. so, it's not a small thing to be messing with these people. >> what is the plan for the property? >> it has been sold. the first half -- the flower market has two market street, one traditionally known as the italian market which is in the front, and then in the back there is the traditional japanese market. the italian market has been sold to a developer to build offices. and this is -- this is a lot of vendors that are inside. and even though they're making
comments about making sure that it won't get rid of the flower market -- as i say, this is an industry that is open every day that cannot afford interruptions to their industry. and, you know, as a major employer of middle class people in this town, they are very concerned because obviously no one was notified. none of the tenants -- >> it opens early, right? that represents a potential conflict where this industry meets residential and office -- well, is a residential development going to go in, mixed use? >> i don't know if it's mixed use or not. but as it is, for example, the parking area for the flower market is extremely limited and is very hard even during holidays to get people in and out. so, basically we just need to look at working with -- with