1. WWW.INDEPENDENTCONTRACTOR.LAW | WWW.NEWSPAPERLABOR.LAW
Taming the Scan-Based Trading Beast
September 24, 2017
L. Michael Zinser,
I-SCMA General Counsel |
ADVOCATES FOR MANAGEMENT FOR OVER 40 YEARS

2. Want to Learn More? www.zinserlaw.com www.independentcontractor.law
@zinsergram
My Personal Motto: “Never, never, never, never give up.”

3. Scan-Based Trading and Legal Issues
There are basically two competitors in the marketplace:
- Nexxus Group
- iControl
What is scan-based trading?

4. Scan-Based Trading and Legal Issues
How does scan-based trading work?
Retail clerk scans the newspaper and the laser hits the barcode.
Retailer pays Nexxus or iControl.
Nexxus or iControl pays the vendor (the daily newspaper or an independent contractor distributor) that sold product to retail store.
Retail store pays only when a copy of the newspaper is sold.

5. Scan-Based Trading and Legal Issues
Claimed efficiencies:
- Eliminates in-store product check-in;
- Eliminates countless weekly payments to vendors;
- Nexxus and iControl have dedicated customer service teams to handle price changes, store requests, delivery issues, and audits.

6. Scan-Based Trading and Legal Issues
Who establishes the wholesale price to the retail store?
Do you have a written contract with the retail store?
- This is a key consideration.
Do Nexxus or iControl interfere with the pricing of your product?
Is your distributor on a buy/sell relationship or negotiated fee per-copy?
Has the Newspaper Publishing Company signed any contract with Nexxus or iControl?
Is this tortious interference with your contract?

7. Scan-Based Trading and Legal Issues
Suppose ten copies of your publication are delivered to the retail store.
- You pick up three unsold copies.
- You anticipate being paid for seven copies.
- Nexxus or iControl pays you only for five copies.
How do you resolve payment for the two unaccounted for copies?
What if the scanning device is inoperable?
Is the audit procedure of Nexxus or iControl working for you?

8. Scan-Based Trading and Legal Issues

9. Scan-Based Trading and Legal Issues
Ohio has a Deceptive Trade Practices Law.
Pennsylvania has an Unfair Trade Practices and Consumer Protection Law.
New York General Business Law §349 prohibits deceptive trade practices or acts; §350 governs deceptive advertisements and product labels.

10. Scan-Based Trading and Legal Issues
Nexxus and iControl advertise that they pay, on behalf of the retailer, the charges of the Publishing Company.
- They imply that they pay the rate established by the Publishing Company.
Do Nexxus or iControl charge the Publishing Company a fee to issue a check for its wholesale rate?
- Is this misleading?
- To promote their services, these companies advertise that they make the payment on behalf of the retailer; should this fee not be paid by the retailer?

11. Scan-Based Trading and Legal Issues
The state unfair business practice statutes should be analyzed to determine whether the current methods used by Nexxus and iControl to deliver their services to retailers comply with these laws.
No cases litigated at this time.
Depending on the facts, a Publisher or Publishers may be able to make out a good case.

12. WWW.INDEPENDENTCONTRACTOR.LAW | WWW.NEWSPAPERLABOR.LAW
Taming the Scan-Based Trading Beast
September 24, 2017
L. Michael Zinser,
I-SCMA General Counsel |
ADVOCATES FOR MANAGEMENT FOR OVER 40 YEARS