The Ramifications of Cheap UPC Barcodes

Our GS1 consultants are on the front line working with companies interested in implementing UPC barcodes, and routinely field inquiries from companies confused and angered about UPC codes (GTINs). Those who are confused are normally overwhelmed with conflicting information posted online and in videos about UPC and barcodes. They are enticed by the notion of spending as little as possible from companies offering cheap UPC barcodes and are puzzled at why they cannot be used by Amazon and other retailers.

Those who purchased the “cheap” UPCs often end up angered as they realize afterward that their UPCs cannot be easily used on Amazon or another retail marketplace. This blog will cover 3 different situations where companies had to unravel the problems resulting from incorrectly obtaining cheap UPC barcodes from an “authorized” reseller.

JAM Paper

“If I could do it again, I would never have used those 3rd party barcodes” – Andrew Jacobs, CEO

Although they were an established multi-generational company, for years JAM Paper never had a need for implementing UPC barcodes. The systems they created internally and even for their website did not use standardized identifiers. When one marketplace required UPCs, they mistakenly purchased shared 3rd party barcodes. For a while, those “cheap” UPC barcodes worked fine but when another marketplace asked for UPC barcodes, they were surprisingly informed that their barcodes did not follow the global standard and consequently could not be used. Andrew Jacobs, CEO, said “five, ten years later we are still cleaning up that mess.”

When these unfortunate situations occur, the solution can be extremely complex. In many cases, manufacturers may have printed thousands of boxes/labels. Relabeling and package redesign can be extremely costly. It is even more challenging to have to communicate the problem with existing trading partners and work out a strategy to retire the incorrectly obtained UPCs.

Home Depot Supplier

Retailers, such as Home Depot, utilize our testing division (Identification Labs) to “certify” their suppliers’ item and logistical barcodes. Our lab evaluates over 30,000 barcodes every year from thousands of manufacturers. Home Depot’s barcode guidelines are harmonized with the GS1 specifications and specifically require suppliers’ UPCs (GTINs) with a brand-licensed Company Prefix. A few times a year, a supplier will fail certification for use of a shared Company Prefix by purchasing discounted UPC barcodes.

One supplier who was called out for using non-brand licensed UPC barcodes, expressed that their provider, Bar Codes Talk, assured them that their barcodes were totally acceptable. Furthermore, they asserted that the board of governors of GS1 US was stacked with representatives from large retailers intent on perpetuating their monopoly. Since we are not GS1 and work on behalf of Home Depot, we arranged a phone call with all parties to clear all of the confusion.

As soon as Jonathan, the manager of Bar Codes Talk, began speaking he started claiming their reseller UPCs were acceptable by Home Depot and GS1 is a massive monopolistic conspiracy. With the backing of Home Depot, we were able to filter the misinformation for the supplier and they had to create new packaging for all of their products. Coincidentally, the reseller reworded their content and removed Home Depot as a retailer that accepts their cheap UPC barcodes.

Amazon – Huge Supplier Confronted With Costly Dilemma

Just last week we were contacted by an Amazon supplier desperate for a solution. As expected, he previously purchased 3rd party barcodes and was panicking that a few of his impacted products were selling in excess of $100,000 per month on Amazon.

Amazon bar code

He completely understood the magnitude of his problem now but needed some solution to prevent his product from getting deactivated and could not risk assigning new ASINs with newly assigned GTINs. Since resellers of 3rd party UPCs obtain older Prefixes that are not bound by any licensing contracts, he was hopeful he could perhaps buy the reseller outright to gain ownership of all of their UPCs. We sadly had to inform him that resellers sell cheap UPC barcodes to thousands of unsuspecting companies and they would all still share the same common Company Prefix.

Summary

“An Ounce of Prevention Is Worth a Pound of Cure” – Benjamin Franklin

The obvious moral to this story is that companies need to understand the limitations and ramifications of selecting cheap UPC barcodes from online resellers. Although GS1 has a monopolistic position for item identification and can be very expensive, its unique role is necessary to ensure global product identification that all trading partners can trust.

There are some instances where a company can use a cheap barcode if and only if they are selling on their own website or a small local retailer.

These issues and situations are real. Due to the abundance of misinformation online and the structure of GS1, most companies rely on our GS1 Barcode Consultants to help implement their UPCs and logistic barcodes. Since the standards agency does not provide .eps barcodes and personal support, our GS1 Barcode Service fee covers the necessary elements enabling companies to identify their products problem-free from day one and beyond.

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