Unanimous Vote by San Diego City Council on Ordinance to Ban Digital-Only Grocery Store Coupons

The San Diego City Council unanimously passed an ordinance on Monday that would ban digital or app-based only coupons in grocery stores, with the second and final reading and vote on the ordinance to come next month.

According to the ordinance proposal, also known as the Grocery Pricing Transparency Ordinance, retail grocery stores that offer digital discounts or coupons would be required to make corresponding paper coupons and pricing available to consumers of identical value. For grocery stores that still want to offer deals through the internet, stores must “post a sign or notice at checkout registers in a location conspicuous to consumers stating that any coupons or digital discounts offered through digital or electronic means are available and will be honored even if the consumer has not signed up for the electronic medium.” Grocery stores will then, if the ordinance is passed next month, have 90 days to comply. While there was not set punishment in the ordinance, it was implied that stores would receive civil penalties if there were any violations.

The author of the ordinance, Councilman Sean Elo-Rivera, claimed that the digital only discounts have caused seniors, low-income individuals, non-English speakers, and those without the internet or smartphones to not get discounts that they would have otherwise gotten through paper or other physical means, making them more susceptible to climbing prices and inflation.

“This becomes problematic when such discounts or coupons are offered only through digital means because it disadvantages those in the digital divide, or those who do not have ready access to or comfort with computers and the internet,” said Councilman Elo-Rivera on Tuesday. “This often include seniors, low-income households, and nonnative English speakers, and often these populations are most impacted by higher food costs.”

“The ordinance takes aim at the growing trend where major chains hide discounts behind digital walls, making it harder for seniors, low-income families, and those without reliable digital access to afford basic necessities,” noted the Councilman in a previous statement.

In an Instagram post last month, Elo-Rivera found that, at one store, the difference between having the app for digital coupons and not having it was about $20.

“If you put yourself in the situation of someone who either doesn’t know how to use the grocer’s app or uses the app right and then the store just doesn’t apply the discount, it’s a $20 difference with just one trip to the grocery store,” added Elo-Rivera.

A ban on digital only coupons

While the ordinance has been attempted at the state level before in New Jersey, Washington State, Illinois and Massachusetts, San Diego City Council President Joe LaCava said that, if successful, San Diego’s ordinance would be the first time it has passed at any level in the U.S.

The ordinance has also received significant backing. In addition to all city councilmembers voting for it, groups like the AARP supported the ordinance proposal. They noted that, 25% of adults 65 and older don’t have internet access, with 39% not owning a cell phone. And without those, the AARP say that it hurts their finances since they can’t access digital coupons.

“This ordinance is a vital step in promoting the financial security of older adults and vulnerable populations,” said AARP California.

Despite so many backers, there has been significant opposition against the proposed ordinance. Chiefly, the California Grocers Association explained that the ordinance would actually hurt San Diegans and reduce discounts, with Councilman Elo-Rivera not understanding what the point of coupons were.

“The real purpose of coupons for the food industry is to introduce individuals to new products, whatever they may be, as well as also reward them for the previous shopping experience. Very rarely are coupons intended to reduce consumers’ costs,” noted California Grocers Association director of local government relations Tim James to the Times of San Diego on Tuesday. “The ordinance would actually reduce access to discounts for San Diegans, not expand it. The proposal would make special offerings like loyalty programs — which fairly reward a store’s best customers — unworkable.”

First proposed in October of last year, the ordinance is next set for another reading and vote next month before ultimate approval.