Best Practices for Uniform Unit Pricing: An Update to NIST SP 1181 and NIST Handbook 130 Regulations

To help shoppers everywhere get the best value for their money, the NIST Office of Weights and Measures (OWM) convened a unit price working group comprised of regulatory officials, industry, academia, and consumer group stakeholders and produced the 2015 NIST SP 1181 Unit Pricing Guide “A Best Practice Approach to Unity Pricing” as a recommended layout and design of unit price labels. The guide has helped retailers and state regulators improve the accuracy and usability of unit pricing information offered in retail stores and ensure uniformity of unit pricing across participating retailers and states. 

In July of 2024, OWM re-established a Unit Pricing National Legal Metrology Working Group to revise the 2015 version of the NIST SP 1181 Unit Pricing Guide. The inclusion of a diverse group of industry representatives, consumer advocates, academia, and regulatory officials in this working group will ensure a balanced and practical approach to addressing challenges and opportunities in unit pricing. The working group's main goal is to update NIST SP 1181 with current guidance on e-commerce and electronic shelf labels and revise existing best practice standards. The focus on new technology in the marketplace, such as electronic shelf labels (ESLs) and e-commerce apps and regulations, highlights the effort to address emerging trends and technologies in retail. 

Once completed, the Working Group will propose changes to the NIST Handbook 130 Section IV. Uniform Regulations C. Uniform Unit Price Regulation (UUPR) and submit a proposal to the National Council on Weights and Measures (NCWM) for review and refinement. This will ensure that both documents (SP 1181 and UUPR) are revised, harmonized, and ready for use and adoption by state regulators and industry.

Notably, some form of unit pricing has existed in the U.S. marketplace since the 1970s. Regulations for Unit Pricing is not Federally mandated but determined on a state-by-state basis. See NIST Handbook 130 Section II. Uniformity of Laws and Regulations for a complete list of the adoption of state laws and regulations. nine (9) states and one (1) territory have mandatory unit pricing laws or regulations in force. Eight (8) states and two (2) territories have voluntary unit price regulations, and thirty-three (33) states, and three (3) territories have no law or regulation in force. 

A further motivation to update NIST SP 1181 is to ensure consistency and modernization in unit pricing practices. Harmonizing the NIST SP 1181 Unit Pricing Guide with the present UUPR regulation in NIST Handbook 130 will provide contemporary recommended guidelines for state regulators to adopt the UUPR and ensure greater alignment between industry standards and regulatory requirements. 

Unit pricing provides a tool to help consumers make value comparisons, which is especially helpful with the proliferation of package downsizing, better known as “Shrinkflation”.  Shrinkflation is a practice in which the package content is reduced without changing the price of the product. It is difficult for consumers to monitor product quantity changes when shopping, so unit pricing is instrumental in assisting consumers in determining the best value. 

For instance, shoppers wanting to buy a bottle of ketchup might think that buying the larger size will give them the best value, and for the most part that’s true. Using the unit price labels, a consumer would quite easily be able to determine whether a 32-ounce bottle of ketchup selling for $ 4.99 ($ 0.16 per ounce) is a better deal when compared to a 14-ounce bottle selling for $ 3.19 ($ 0.23 per ounce).

Unit price labeling has other benefits beyond the direct consumer benefit. For public health, such labels can display nutritional information, such as low-sodium or high-fiber foods. For businesses, it can improve ordering, inventory control, and pricing accuracy, which ultimately saves money. Further, retailers that use unit pricing are perceived as being consumer-friendly, thus improving customer satisfaction and the shopping experience, which keeps customers coming back. 

The updated NIST SP 1181 Guide through this collaborative stakeholder effort will help ensure that unit price labels across the U.S. marketplace are uniform, easy to read, informative, and understandable as possible. This is one relatively easy way that retailers, who are strongly encouraged to adopt, can offer a service that customers want and will be win-win overall.