Support for a bill that would allow Wisconsin businesses to sell goods for less than their values came into the limelight as lawmakers proposed a bill to repeal it.

The Unfair Sales Act, also known as the Minimum Markup Law, prohibits retailers from selling goods at a loss, David Ward, Cooperative Network spokesperson, said. 

“If a product costs a dollar, you can’t sell it for 95 cents,” Ward said. “You have to sell it for over a dollar.”

Without the act’s regulation, competition among Wisconsin businesses will change. Large businesses would be able to move into communities, price goods below their costs and buy out smaller businesses, Ward said.

There are certain circumstances that allow the law to be waived, for instance, going out of business sales, Ward said.  

Ward also said local and smaller retailers in the community might try to react to it, but this will only create financial problems, which could cost them their businesses.

Sen. Leah Vukmir, R-Wauwatosa, said in a Milwaukee Journal Sentinel op-ed that the Unfair Sales Act maintains artificially high prices for consumers and businesses and gives more power to the government, instead of to the business owners.

“These higher prices hurt consumers, and businesses are often forced to pay stiff fines or face the possibility of litigation as a consequence of violating the law,” Vukmir said in the op-ed.

Vukmir said below-cost pricing indicates a strong, competitive market, unlike what supporters of the act claim. She said the act prevents Wisconsin-based businesses from providing full discounts and places them at a competitive disadvantage.

The act becomes an inconvenience during holidays such as Black Friday, Vukmir said, because Wisconsin retailers cannot price goods as low as they are in other states. This forces people to either shop in other states or shop online, leading to a loss in Wisconsin’s tax revenue.

“The Unfair Sales Act lacks rational basis and is an unnecessary intrusion into the private sector and the free market,” Vukmir said.

Vukmir also said she and Rep. Jim Ott, R-Mequon, will introduce legislation that will repeal the act in the near future.

The Main Street Business coalition released a statement Monday, Sept. 21, against the repeal in which the coalition said small businesses are able to support Wisconsin’s economy and compete with each other because of the Unfair Sales Act.

It does not protect such businesses from a free market, but gives them the opportunity to successfully thrive in a fairly competitive market.

The statement noted about 45 percent of revenue from local businesses is spent within a two-county radius. Mega-retailers, in comparison, only spend 14 percent.

“Without the law, mega-retailers can force out local businesses,” the statement said. “It’s happened around the country and when it does, consumers lose choice, price and service.”

Ward said repealing the act may initially seem like a good idea because the lack of competition would lead to a decrease in the price of goods.

But this would eventually create a situation where prices would be uncertain, he said.