One product, so many prices: Unit price, list price, ‘MSRP.' Which one matters at the checkout?

Deodorant, detergent, granola bars, cookies, underwear. Scan the store shelves for these everyday items and you’ll find multiple price labels underneath them. Typically, there is a label that says ‘Unit price,’ next to another label that says ‘You Pay,’ or the actual price at checkout. On deal days, a third label is often added, usually in a bright neon color, with higher numbers than the first but lower than the second. For certain purchases like cars, electronics, and luxury items, there is another price indicator called the ‘manufacturer’s suggested retail price’ or MSRP. These various prices on the tags can be confusing for shoppers and may not always be beneficial. According to industry experts, price labels primarily serve as a tool for retailers to incentivize purchases. For consumers, the unit price is particularly useful as it shows the price per volume or weight of the item. This allows shoppers to compare prices quickly and make an informed decision, especially when there are multiple package sizes available. However, it’s important not to assume that the bigger-sized option is always the better deal. Checking the unit price for each option is crucial for clarity. Off-price discounters like TJ Maxx often display a ‘compare at’ price, which implies that the customer would have paid that higher price elsewhere. However, this practice can be murky and has led to disputes with customers. The MSRP, or manufacturer’s suggested retail price, is merely a suggestion from the product maker regarding how much a customer should pay. It originated from a time when manufacturers had more control over retail pricing. Today, it serves more as a marketing strategy than a legal requirement. Retailers are free to set their own prices, as long as they comply with laws related to advertising and competition. While the MSRP still appears on certain products like handbags, coats, and electronics, its relevance today is debated. Manufacturers used to have more power in the manufacturer-retail relationship, but with the consolidation of large retailers like Walmart, the dynamics have changed. Many view the MSRP as a legacy term that continues to exist but may not be useful for consumers anymore.