Businesses often display comparison prices on goods. A product may show the original price as well as the current price, known as was/now pricing so that customers can calculate their savings. Some businesses display the wholesale price, recommended retail price, or even a competitor’s price for the same product.
Your business can engage in two-price comparison advertising, and it can certainly be a helpful promotional tool. But, you do need to make sure that you are not misleading customers with the information you provide. Displaying two-price comparisons incorrectly can mean a breach of the Australian Consumer Law (ACL) and can incur penalties. This article focuses on was/now pricing and will help your business consider how you can display was/now pricing lawfully.
Two-price comparisons can be seen in-store, on television advertising, in catalogues, and online. It is often used to attract customers, by trying to show them a significant difference between the product’s original price, and the price that the business is now offering. Below, we give business owners four pointers to be wary off when engaging in was/now advertising.
Are the Savings Genuine?
Was/now pricing includes two figures:
1. The product’s original price; and
2. The new offer.
You must make sure that you were actually offering the product at the “was pricing” otherwise, it could amount to misleading conduct under Australian Consumer Law.
For example, you advertise a television at a “was price” of $999 and a “now price” of $799. But you have never offered the television for sale at the price of $999, and as a result, your pricing would constitute misleading conduct. Customers would not necessarily save the $200 since you have never sold the television at the more expensive price.
How Long is the Business Offering the Price For?
It is not enough that the business offered the product once-off at the advertised “was price”. You also need to have offered the price for a reasonable period. Each business’ unique circumstances determine what constitutes a reasonable time. It is then important that you can demonstrate your sales and advertising results during the period where your business offered the product at the “was price”.
Can I Still Claim a “Was Price” Even if I Didn’t Sell the Products?
It is possible to publish a “was price” for a product even if you were not able to sell the product at that price. This is, however, certainly trickier to prove. So, try to keep as many records as possible to demonstrate that you did advertise and offer the product at the “was price”.
To be on the safe side, it is best practice to keep records that can substantiate your two-price claim. Records should show how long you offered “was prices” for as well as the original price of the goods you sell. If you can’t back up your claims, then don’t display those prices! You run the risk of breach the ACL and being regulated by the ACCC.
Questions? Get in touch on 1300 544 755.
LegalVision’s experienced consumer lawyers can help you understand your rights and obligations and help you avoid penalties.