How two Argentines' humble barcode scanning app helped fight inflation and got them labelled as leftists

By Juan Forrer , written on April 21, 2014

From The News Desk

Alejandro Torrado and Yamila Fraiman didn't expect the barcode scanning app that they developed in a week, over their winter break, to get so much attention.

They certainly didn't expect their scanner to lead to thankful calls from the Argentine government for its inflation-busting effects, nor did they expect it to lead to them being described as leftist radicals.

Torrado and Fraiman didn’t set out to cause controversy. These two students at the University of Buenos Aires just wanted to get the best deal when they went to the grocery store. They realized that the best way to do that was to buy goods that were price-controlled by the government -- but that the vast majority of Argentines didn’t know where to find them. Beyond that, they wanted to make sure that businesses were adhering to the price controls. They developed the app, called Precios OK, to help consumers and hold businesses accountable. Today it has been downloaded over half a million times.

“We aren’t interested in politics, and we never imagined that it would have these repercussions,” says Torrado. “We made something that seemed useful for ourselves, and it ended up exploding.”

With the app, users can scan the barcodes of products at grocery stores, allowing them to see whether a product is part of the basket of goods covered by the price controls. They can make sure the price at the store corresponds to what it’s supposed to be, and they can file a complaint to the government directly through the app if the prices don’t align or if the product isn’t in stock. It’s part of the reason that the price controls are having the effect of lowering the rate of inflation (albeit only slightly), according to the government's price index, and as a result, part of the reason why the government decided this month to renew the agreement, adding 108 more products to the basket, bringing it up to approximately 300 products.

The price controls -- Precios Cuidados -- is a government-led initiative first launched in January that’s seeking to keep prices from rising in Argentina, a country that faces inflation rates hovering around three percent per month. With the Precios Cuidados program, businesses along the supply chain voluntarily agreed to create a basket of goods whose prices are consistent in stores across the country and whose prices don’t rise on the whim of any individual or business. Even though stores that sign on don’t get a subsidy, the idea is that by signing on, those in the supply chain will be better off in the long run by reaping the benefits of low inflation, just like everyday consumers.

Though the inflation statistics here are a point of contention between the government and private economists, the government says the Precios Cuidados program is having an effect, and the monthly inflation rate fell from 3.7 and 3.4 percent in January and February, respectively, to 2.6 percent in March. Some private economists attribute the effect to an economic slowdown and not Precios Cuidados. But regardless of where the anti-inflationary effect is coming from, Leonetti says that adherence to the program is critical if the program is to have any effect, and with thousands of stores across the country, enforcing compliance can be difficult.

That’s why the Precios OK app has been a surprise boon for the program, turning hundreds of thousands of everyday Argentines into enforcers of the agreement, leading to the higher levels of adherence. Two grocery stores have been closed for failing to abide by the agreement, and complaints that led to their closures came from the app. Additionally, the government is investigating more than 600 grocery store locations for non compliance, of which many initial complaints came from the app— more, in fact, than came from the toll-free number the government set up to handle the complaints.

“The app is the stamp that shows that Precios Cuidados [the price control measures] has a life of its own and that it will continue for a period of time, longer than some thought at the beginning,” says economist Marcos Leonetti, director of the news site La Economia Online.

When grocery stores see this many downloads, Leonetti says, their options for sneaking higher prices by consumers become more limited. A handful even resisted the app for that reason, and there were multiple stories about security guards escorting users out of stores for using the app. But grocery stores backed off when they saw the backlash that it would produce, say Torrado and Fraiman.

“It has been downloaded so much that it’s an indicator that the citizenship is taking it seriously,” he says. “It gives the consumer support, visibility and identity. And for that, the Precios Cuidados program is in a better place because of it,” says Leonetti.

The staying power of the app was never certain. Its continuance relies entirely on the government extension of the program, which was recently extended to June. This doesn’t bother Torrado and Fraiman, though. They never intended to make money off the app. The ads they run only bring in meager revenues. But the better payment they got was in experience and personal marketing power, they say, and for now, that’s enough for them.

These two developers are strong optimists in a country where confidence in economic institutions is lacking and where founders lament the difficulty of establishing businesses. These two developers couldn’t say whether or not they agreed with the negative prognostications of the Argentine business development climate. They’re new to it. But they were going to go for it anyway.

“We will tell you how it is in a couple years,” Fraiman says.

[Image via Thinkstock]