Proliferation of certification labels hurts their credibility

Consumers are losing confidence in certification labels because of the proliferation of such labels and because of the lack of certainty over what such labels actually mean. As a result thereof, the credibility of all certification labels has come under pressure. This has been revealed by a preliminary study of the Netherlands Authority for Consumers and Markets (ACM) into the role and functioning of certification labels for consumer products. Anita Vegter, Member of the Board of ACM, explains: “Organizations and businesses that issue certification labels would do well to put an end to this proliferation. A framework should be established for the creation and management of certification labels. That would allow these labels to reassume their originally intended role: offering businesses the opportunity to differentiate themselves, and offering consumers a trustworthy tool to make well-informed decisions.”

ACM’s study has revealed that consumers believe that they should be able to rely on the fact that certification labels can be trusted, provide clear information, and that an independent authority regulates these labels. This is at odds with consumer opinions of current certification labels. Hundreds of such labels are currently in existence, and some of them are seen as marketing gimmicks. Consumers have trouble grasping the true significance of individual certification labels.

Significance of trustworthy labels

Certification labels have an added value if they are able to tell consumers something about a product that they are unable to assess or check themselves. This is particularly true in situations like sustainable production methods or safety labels. Consumers are willing to pay more for products or services the certification labels of which can be trusted. The falling confidence in certification labels among consumers is a risk for all businesses that wish to invest in certification labels with which they want to differentiate themselves.

Regaining the confidence of consumers

Ms. Vegter adds: “ACM is of the opinion that it is the responsibility of market participants and trade associations in particular, together with consumer organizations, to take steps towards establishing a framework for the creation and management of certification labels. The government can help coordinate and stimulate that process. This can already be observed in areas such as food quality and sustainability. Everyone will benefit from a well-functioning system of trustworthy certification labels.”