As a business owner, it may seem tempting to display different prices in different scenarios for the same offering just to see how customers respond. However, there are regulations under Australian Consumer and Fair Trading laws that may prohibit you from doing so. It is important to be aware of your obligations under these laws. Crucially, you must understand what happens if, you have displayed multiple prices for the same good or service. Which price do you have to honour? Are there any penalties? This article will explain all that you need to know as a business owner when it comes to multiple pricing.
What Is Multiple Pricing?
Multiple pricing occurs when a business displays more than one price for the same good or service. For example, if online an item is priced at $100 but in-store the price of that same item is $80.
Engaging in multiple pricing is prohibited under Australian Consumer Law. This prohibition aims to protect consumers from price discrimination and exploitation.
What Is Considered a Displayed Price?
For the purpose of Australian Consumer Law, you will have “displayed” multiple prices where the price for the goods is written, printed, stamped, located on or applied to the goods. For instance, this may include attaching a price tag or listing a price in:
- catalogues;
- flyers;
- in-store display windows;
- online stores;
- online advertisements;
- television advertisements; and
- most other forms of marketing materials.
Where the displayed price is not out of date and varies for the same good, it will likely be considered multiple pricing.
Continue reading this article below the formWhat Happens If I Display Multiple Prices?
If you display different prices for the same item, even if by mistake, you must sell the product for the cheaper of the displayed prices. Alternatively, you must stop selling the good or service until the incorrect price is corrected.
For example, a customer wants to buy a sofa from your company. You sell sofas on both an online store and in a physical store. You advertised the price of the sofa online as $2000. However, the same sofa has an in-store display that shows the price as $2500. Since you have displayed multiple prices for the same sofa, it must be sold for the lower price of $2000.
Due to commercial reasons, you may permissibly choose not to sell the sofa for the lower price. However, if you sell the sofa for the higher price of $2500, you will be breaching multiple pricing regulations.
There are exceptions to multiple pricing regulations. For instance:
- when there are different prices for different regions;
- where a price is displayed in an overseas currency; or
- if one price is hidden by another price – for example, one price sticker covers another.
What Are The Penalties For Engaging in Multiple Pricing?
If you are found to have engaged in multiple pricing, you may receive a civil penalty or a fine.
Body corporates may be fined up to $5,000, and individuals may be fined up to $1,000.
This guide will help you to understand your corporate governance responsibilities, including the decision-making processes.
Key Takeaways
Under Australian Consumer, your business is not permitted to display different prices for the same good or service. Whether by accident or otherwise, if your business displays multiple prices for a particular product or service, it must sell the good or service for the lowest price displayed. Alternatively, your business may decide not to sell the goods or services until the multiple prices are amended. If your business engages in multiple pricing, you may face monetary penalties. However, if the multiple pricing does not infringe on consumer rights, your business may not receive a fine. Rather, your business will likely be given the opportunity to remedy this mistake.
If you need advice on multiple pricing, contact our experienced consumer lawyers as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Multiple pricing occurs when a business displays more than one price for the same good or service.
If you are found to have engaged in multiple pricing, you may receive a civil penalty or a fine.
Australian Consumer Law prohibits businesses from engaging in multiple pricing.
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