It is no secret that customers are always looking for the best deal when shopping for any goods or services. Nowadays, all customers have to do is a quick Google search or scroll on social media to compare prices and offerings between competitors in the market. This is where price matching comes in. A popular strategy among businesses is to advertise a price match guarantee. However, as a retailer, it is important to understand the obligations that come with such guarantees. In this article, we explain whether your business needs to honour a price match guarantee.
What is a Price Match Guarantee?
A price match guarantee is a promise made by retailers to lower their prices to match or beat the prices offered by their competitors for the same product or service. It can be a good way of appealing to price-conscious shoppers and increasing consumers’ confidence that they are receiving the best possible price.
Understanding the Terms and Conditions
Price match guarantees, like any other business policy, must be set out in clear and fair terms and conditions. These conditions will ensure consistency and transparency in price matching. The following section unpacks key clauses commonly found in the terms and conditions for price match guarantees.
1. Eligible Competitors
Retailers will often define which of their competitors’ prices they are willing to match. For instance, the guarantee may only apply to prices from brick-and-mortar stores and not online retailers. Your business should clearly state this in your terms and conditions to avoid any ambiguity.
2. Product Requirements
It is essential that the terms specify which goods or services qualify for the price match. The goods or services should be identical or substantially similar with regard to brand, model, size, colour, and any other relevant attributes. Many retailers will also state whether the goods need to be in stock and available for immediate purchase at the competitor’s store.
3. Price Verification
Your terms and conditions should set out how customers must prove that your competitor is offering a lower price for the same good or service. Consider what types of evidence you may require from customers for this verification. For example, you may require a copy of the advertisement, a link to the competitor’s website, or a photo of the listing online.
4. Time Limits
There should be a time limit for when customers are able to request a price match under the guarantee. This will ensure that customers make requests promptly and that they do not abuse the price match guarantee policy. You should clearly set out the time frame for customers to avoid any confusion or disputes.
5. Exclusions
If you plan to exclude or limit the instances when a customer can rely on the guarantee, you should clearly communicate this in the terms and conditions. For example, you may wish to exclude clearance items from the price match guarantee policy. You should clearly communicate these exclusions to your customers so you can effectively manage their expectations.
Continue reading this article below the formWhat Are My Legal Obligations?
The terms and conditions attached to your price match guarantee form a legally binding document. Even when you advertise the guarantee without terms and conditions, you may still have obligations under Australian Consumer Law (ACL).
Where a customer makes a valid request under the guarantee, that is, they have met all the specified requirements set out in the terms and conditions, you will have a legal obligation to honour the price match. Failing to do so may be deemed misleading and deceptive conduct under ACL. Likewise, you may receive severe penalties from the Australian Competition and Consumer Commission (ACCC). It is, therefore, essential to thoroughly understand your price match guarantee and how it is being presented to your customers.
If you reject a customer’s price match request, you should provide them with a clear written explanation for the rejection. Likewise, identify any relevant clauses within the terms and conditions of the guarantee that either they have not met or allow you to deny the request.
This guide provides key information on how to manage a business dispute as quickly and cost-effectively as possible.
Key Takeaways
Price match guarantees are a tool many businesses use to draw in customers searching for the lowest price in the market. It is essential for the guarantee to be accompanied by a set of terms and conditions that clearly set out when and how the guarantee will apply. These terms and conditions will ensure that both retailers and customers have a clear understanding of their rights and obligations under the guarantee. This can prevent disputes and create a positive shopping experience.
If you need help drafting the terms and conditions for your price match guarantee, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to our lawyers to answer your questions and draft and review your legal documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A price match guarantee is a promise made by retailers to lower their prices to match or beat the prices offered by their competitors for the same good or service. It can encourage your customers to know that they are getting the best price for a certain product.
There is no obligation for retailers to offer a price match guarantee. It is a strategy and tool used by retailers voluntarily to attract more customers.
You have obligations under ACL to honour any guarantee you have advertised, subject to the terms and conditions of the guarantee. Likewise, you also have obligations under ACL regarding how this guarantee has been presented to the customer.
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