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Illegal Holiday Sales?

The holidays have passed and the madness associated with holiday sales has as well. But what's so common in the United States is actually quite uncommon around the world, particularly in Europe. I read an article in the WSJ last Christmas Eve about how German stores are finally offering items on sale during the holiday season. Up until 2004, that practice was actually illegal! The stores are finally loosening up, extending store hours and offering significant discounts.

It's interesting why those laws existed in the first place. The simple answer is that it's a general controlled economy system that has existed in Europe for some time. Trade unions, churches, and small retailers all have traditionally argued that increased flexibility hurts store workers and benefits only the larger retailers. And then a more unusual reason was also included in the article:

In Germany, it took years of intense debate to eliminate a Nazi-era law that prohibited haggling and put limits on bonus schemes such as store-loyalty cards. Enacted in 1933 after the economic instability following World War I, the so-called Discount Law and another regulation passed at the time, the Free Gift Act banning giveaways except for trinkets, were seen as a way to protect the distribution of goods to consumers, and to protect consumers from the vagaries of the free market. For the Nazis, it was also a way to hurt the country's department-store owners -- many of them Jewish -- who had been experimenting with creative sales strategies.

The Discount Law lived on beyond the war years because many consumers saw a need to protect small shopkeepers from large retail chains. Some thought that consumers, too, needed protection. It wasn't until this set of laws was scrapped in 2001 that retailers could offer deals like gifts with purchases and discounts for volume buys.

"Germans tend to adhere to structures and rhythms that don't change," says Rolf Pangels, managing director of the retail federation BaG in Berlin. "And they tend to want a law for everything. An American wouldn't understand all the laws we have
here."


I'm sure a lot of traditions will have to change in the coming years.

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