Many new companies are unaware that they need to obtain a Company Prefix directly from GS1 US (formerly the Uniform Code Council). There are online firms offering individual UPC’s. Many of these UPC barcode resellers are preying on the lack of understanding by many small new businesses. Common claims are “Our UPC’s originate with the GS1”, “Official UPC codes”, or “Authentic and Unique UPC barcodes”. Before you take a chance with your company’s future, we encourage you become educated on the actual requirements and processes required to properly mark your items and shipments. This alternative might work for your situation, but you should be fully informed of potential limitations.
The Company Prefix is a unique identifier which represents a particular company, and is used in other types of barcodes in addition to the UPC. When a company purchases a UPC from a “reseller” they are only receiving a single UPC number whose company prefix is currently assigned to another company. In fact all of the companies who purchased UPC’s from this company will have identical prefixes.
Is purchasing a single UPC from a reseller legal?
Including UPC barcodes on products is not a legal requirement. However, most retailers around the world have adopted the GS1 system (UPC/EAN) for item identification.
As a reaction to a court case, which the Uniform Code Council settled for $3.89 million, in August of 2002, they amended their contract to state “The license agreement for our membership prohibits any use of the Company Prefix other than for the use of the owner company, including but not limited to selling, sharing, leasing, sub-dividing, or re-selling the Company Prefix”. Since this statement was not included in the application for any company who purchased a membership and received a Company Prefix prior to that date, these limitations were never part of the original agreement and consequently numbers from older prefixes could be sub-divided.
Most major retailers will probably request their suppliers to obtain their own prefix and there are not any retailers who endorse this practice. In fact, Wal-Mart has posted the following statement on their website due to the problems caused by the confusion: “Please enclose in your proposal packet a copy of your UCC (GS1) membership letter reporting your firm’s actual number. You must be registered directly with the UCC (GS1) and not through a third party.”
Amazon Now Requires Brand Associated UPCs (reseller UPCs will not work)
In 2016, Amazon recognized the issues of trust they were having with UPCs not associated to vendorss’ brands. Consequently, they began validating UPC for new and existing suppliers against GS1 Company Database. Companies who use UPCs with shared Company Prefixes risk having their products deactivated and losing all accumulated reviews.
Important Things to Consider
- If your company intends to someday supply product to medium and large retailers, your company must have its own unique Company Prefix. There are other types of barcodes and EDI (Electronic Data Interchange) transactions which include this unique company identifier. If multiple companies purchased UPC’s from the same reseller, the duplication of prefixes would cause problems at most retailers. Consequently, these suppliers may be subject to compliance offset charges.
- If you purchase a UPC from a deceptive reseller, you better have confidence in that company to assign unique UPC numbers to varying customers. What assurance are you given that the number assigned has not already been sold to someone else? If you do decide to work with a reseller, make sure you feel comfortable with the legitimacy and security of the company you choose. There are some resellers which do provide physical company addresses and offer actual certificates illustrating the unique UPC number assignment. One recommendation is to call the company during business hours to verify that they are indeed a legitimate business. Remember, NOT EVERYTHING STATED ON A WEBSITE IS TRUTHFUL. There is even one reseller claiming to have sold over 9,390,000 unique numbers, which is more than 90 times the number of numbers available per company prefix.
- Is the barcode image file you receive a vector based image made to the requirements of your packaging? The GS1 US recommends that original UPC barcode digital files be created based on resolution and packaging requirements. Depending on the printing process and dimensional requirements, UPC barcode can vary in size. Most of these resellers simply provide a low resolution jpg or gif file, which is not acceptable for proper reproduction. If a barcode can not be scanned, it is worthless and the money you might have saved was wasted.
- If a reseller is offering to provide you both UPC and EAN code, do not use them! They have no idea what they are doing. UPC numbers by definition are universally acceptable worldwide, and they are only type necessary for US manufacturers who wish to sell their goods globally.
The question which frequently gets asked is “My company is just starting out and we can not afford the $400 fee from the GS1 US, what should we do?” First, be aware GS1 US a few years ago lowered the price for GS1 Company Prefixes. Second, contact your potential retail trading partners (if possible) and inquire if a unique company prefix is required or if you may use another company’s prefix. We also suggest you contact us at 800-662-0701 and voice your concern. If you only need a single UPC because you want to include an item on a website, or sell to an internet company (Amazon), purchasing a single UPC might be a realistic solution, as long as you understand the limitations and potential problems.
For additional information on UPC/EAN EAN numbering and barcode requirements please visit www.gs1-us.info/gs1.