E-retailers must focus on their specific goals and examine a vendor’s reputation and market expertise, not referrals.
The Federal Trade Commission recently beefed up its Appliance Labeling Rule.
A new amendment to the Federal Trade Commission’s Appliance Labeling Rule went into effect July 11 that requires e-retailers to display EnergyGuide labels for all new TVs sold online. Even so, a check today on 14 merchants that sell TVs and are are part of the Internet Retailer Top 500 suggests that only half are displaying the labels.
The bright yellow-and-black EnergyGuide labels display the estimated annual energy cost for running major household appliances, along with the usage and utility rate assumptions used to calculate that figure. Manufacturers must provide the labels for their products to retailers. Since the 1970s, federal law has required bricks-and-mortar and catalog retailers to include EnergyGuide information on such appliances as refrigerators, dishwashers, window air conditioning units and water heaters. E-retailers have been required to display EnergyGuide labels for products in these categories since 2007, when an amendment to the Appliance Labeling Rule expanded the definition of a catalog retailer to include online retailers.
In October 2010, the Federal Trade Commission added TVs to the product categories for which labels must be displayed; the amendment went into effect July 11. All TVs manufactured after May 10 of this year must display the label. TVs manufactured prior to May 10 are excluded. “Unlike many years ago, before flat screens and plasma, today’s televisions vary widely in the amount of energy they use,” says Jon Leibowitz, chairman of the FTC. “By comparing information on the EnergyGuide labels, consumers will be able to make better-informed decisions about which model they choose to buy, based on how much it costs to operate per year.”
Internet Retailer checked the web sites of 14 e-retailers that sell TVs and reviewed the product detail pages for the top two flat-panel TV models the e-retailer displayed in that subcategory. 50% displayed the EnergyGuide label on at least one of the two reviewed products, although it was unclear whether those TVs were manufactured before or after May 10. E-retailers in compliance include Amazon.com, No. 1 in the Top 500 Guide, SonyStyle (No. 14), Crutchfield Corp. (No. 120), Abt Electonics Inc. (No. 151), B&H Photo-Video-Pro Audio (No. 158), Panasonic Corp. (No. 179) and RadioShack Corp. (No. 254).
How e-retailers display the mandated EnergyGuide label varies. Some e-retailers prominently display the EnergyGuide icon that links to the TV’s energy use information. Consumers visiting Panasonic.com, for example, can click an EnergyGuide link on each TV model displayed on the category results page. Amazon.com features the icon in the technical details area of the individual product page. B&H Photo-Video-Pro Audio embeds the icon within the product overview text.
FTC regulations do not specify how e-retailers must display the label for any appliance, just that they must be included. Last week, law firm Earthjustice filed a petition with the FTC calling on the agency to standardize how e-retailers display the labels. “Energy cost information should be front-and-center for online listings, just as it has to be for products in stores,” says Jon Wiener, associate attorney for Earthjustice. “We shouldn’t make people comb through obscure sections of web sites to find it.”
The FTC last year for the first time issued civil penalties to online retailers for not including EnergyGuide labels for products sold on their web sites. Four e-retailers settled with the FTC. They are: P.C. Richard & Son Inc., which paid $180,000; Abt Electronics, which paid $137,500; Pinnacle Marketing Group Corp., which paid $100,000; and Universal Appliances, Kitchens, and Baths Inc., which paid $100,000. Universal Computers and Electronics Inc., which sold at appliancebestbuys.com, is challenging a $540,000 FTC penalty in court. The case will be heard Dec. 1, an FTC spokesman says.
Abt Electronics co-president Jon Abt says his company provides whatever information is electronically available from manufacturers on Abt.com. “The reason we were fined is because we were never notified by the FTC or the appliance manufacturers that this was required,” he says. Abt.com now displays the mandated labels for appliances and TVs.
The FTC spokesman says the agency does not communicate directly with all retailers about the rules or rule changes. He says the government agency puts out a public call to the industry for comments when changes to the Appliance Labeling Rule are under consideration and keeps in contact with the retailers and manufacturers that respond. When the FTC makes changes, those changes are published in the Federal Register, the official daily publication for rules and notices from federal agencies, and a press release is issued.