Uploaded by Pranab Malla

Retail Governance and Regulation

Government regulation impact the
retail sector
 The Retail Industry offer variety of products ranging
from grocery to clothing to furniture.
 All have their own set of unique regulatory laws and
Government Regulation on Retail
 Advertising Laws:
 This rule dictates the message any company trying to convey to
 Violation of this law may lead to company paying financial penalties
that far exceeds the actual monetary damages consumers may suffer
 Also no companies can make false or deceptive claims with regards to
advertising a product or services.
 Thus business marketing department devise advertising campaigns
communicating the true messages
 Consumer Protection Laws:
 The consumer protection laws prohibit business from using
misleading marketing campaigns to drive sales revenue
 A consumer has right to sue a business if it can’t deliver the
 Consumers can also sue businesses that promote products at
discounted price but do not actually offer the discount
 This law encourages business to act responsibly in using
marketing techniques to generate revenue
 Misleading Discount Prices:
 It is illegal for a business to refuse advertised pricing discounts.
 It is also illegal for a company to deceive consumers into thinking
that discount exists when it actually does not.
 For example, if a retail clothing store does promotion of a $55
regular pair of jeans saying that $ 20 discount when the jeans
have never been sold @ $ 75 is a violation
 Thus regular price of merchandise should not be advertised as
sales price
 Seeking Punitive Damages:
 Customers have the right to seek punitive damages from the
offending businesses for deceptive practices
 Punitive damages in case of false advertisement is
punishable by the court
 Such regulation put forth discourages other businesses to
have the same practice
 Taxes
 The retailers are obliged to pay the highest tax rate
 Most brick and mortar retailers have been charged with
sales taxes but not the internet based retailers
 Federal Trade Commision and Department of
 The brick and mortar retailers have to deal with strict
labour relations laws and contract restrictions with
 These rules govern the remuneration and benefits of labour
and determine their work
 The federal trade commission helps in the regulation of the
consumers and retailers relations
 Likewise the department of labour maintains the relations
of the retailers with labours
Some of the key legislations that a retailer must know:
 Sale of Goods Act:
 Goods sold should match the description given by retailers, the
mentioned quality and should fit their intended purpose
 Consumer have right to ask for repair or replacement, request a refund
or reject if a retailer does not meet their requirements
 Unfair Terms in Consumer Contracts Regulations:
 All terms and conditions must be fair, accessible and expressed in clear
 All unfair terms used by retailer to delay in service or failure to perform
leads to breach in consumer contracts regulations
 Consumer Protection from unfair trading regulations:
 Retailers should never indulge in mal-practices of sales and customer
 The legalities of selling retail clothing:
When opening Retail clothing store all the necessary
licenses and certificates are to be obtained
The business should adhere by the laws to sell clothes
from the shop
Here are some of the legal measures that are
undertaken for selling retail clothing:
 Resale Certificates:
 The business is required to obtain resale certificates when
purchasing from wholesalers
 This certificate enables a business to purchase from the
wholesalers when required
 The business must provide name, type, location and
description of the retail services to obtain such permits
 Seller’s Permit:
 A seller’s permit is required for selling retail clothing
 Both the reseller and wholesalers are to obtain the seller’s
 Registration can be made in state department of revenue
for seller’s permit
 Labelling Laws:
 According to federal law commission all the textiles and
clothing are to be properly labelled without violation of
 The requirement is to sell only products that contain name
and fabric count for each clothing piece
 The manufacturer’s name and country of origin should also
be clearly stated in the label
 Safety:
 If a business sells used clothing, it should stay up to date
with consumer protection law and stay away from unsafe
 For instance, the consumer product safety improvement
acts require the children’s clothing to be tested for safety
 Clothing not tested for safety are often thrown out
Major Implications for local, regional,
national and international marketing
 Local marketers are concerned with fulfilling
demands of customers that are close and clustered
tightly around
 Quick changes is made for customer
 Chances to get more close with customer gaining
 The potential market is limited
 Chances that a new competitor or environmental
factors may become more challenging
 Regional Marketers have multiple production plants
and more distribution networks as it covers more areas
 Regional marketers tend to serve an entire state,
adjoining cities or parts of state
 Thus there is need of extensive adjustment in
marketing strategy
 National marketers are the ones that market
throughout a nation. They have many manufacturing
plants, multiple distribution system including
 This type of marketing has immense profit potential
and exposure to aggressive competitors
 International marketers have their presence in more
than one country
 Marketers adopt marketing mix to be suitable for
various countries need.
 The legal and cultural differences influence the
outcome of any applied strategies
 For instance, US market is saturated with US made
products and now it is growing interest on foreign
markets for production