Navigating Advertising: A Comprehensive Guide for Traders on Price Discounts, Best Prices, and the Law
Advice on Promotions for Traders: Strategies for Affordable and Attractive Marketing - Sales promotions tactics: Optimizing retail advertising for cost savings and customer attraction
Hey there! Feeling price competitive? Us too! It's a jungle out there, and we all want to snag the best deals we can. But wait a sec – before you entice customers with fantastic discounts, bonuses, or the best prices in town, keep these legal aspects in mind. The high court's got their eyes on the prize too, folks!
Payment clarity is key
The Price Indication Ordinance is here to ensure that companies are crystal clear when showcasing the prices of their goodies or services to consumers. They say the whole price – that's the amount you'll actually fork over, including taxes and other miscellaneous costs – must be explicitly stated.
But what about the nitty-gritty?
If you're hawking food, potting soil, or fabrics, you may be obligated to list the basic price as well. By definition, that's the price per unit of measure like per kilogram, liter, or meter. It's not rocket science, but it's the law.
Discount dos and don'ts
When it comes to discounts, you want the line queuing around the block, right? Well, remember that misleading consumers is not a savvy marketing strategy. Make sure you're not cherry-picking fake original prices, manipulating the temporary price increase game, or claiming impossible discount percentages. That's a big no-no, pal.
In the reference price race
Back in the day, hacking together a price reduction ad was a piece of cake. Now, there's a rule from the Price Indication Directive that sets things straight: In every advertisement for a price reduction, you must disclose the lowest price demanded over the previous 30 days – yep, what we call the reference price.
To indicate, or not to indicate? That is the question!
Originally, there was a tussle about where and how this 30-day reference price must be displayed. But the European Court of Justice sorted it out for us: Percentage discounts or "price highlighter" deals must reference that 30-day reference price, and showing it only in a footnote is simply not enough.
Karlsruhe knows best
Recently, the Federal Court of Justice tackled a complaint involving the food retailer Netto Marken-Discount. The issue? Their advertising was deemed misleading, as the reference price and current price were too closely associated. Will the final ruling provide the clarity we need? Wait and see, folks!
Implications for competition
The game is afoot! Pricing is king when it comes to competition, and misleading consumers ruins the whole game. "If I'm deceptive, then the entire competition is disrupted," warns Reinier Münker, Competition Center's managing director.
Don't cry over spilled milk (or maybe just a little)
With the European Court of Justice's ruling, we're seeing less of those price reduction ads, and more of those recommended retail prices (RRP) popping up. The trick's in making it seem like you're offering a real price reduction while actually advertising the RRP, and, sadly, many RRPs are far-fetched. Laying the foundation for further heated debates down the line!
So, what's the bottom line?
Don't bid adieu to competition, but bid farewell to deceptive pricing practices. Offer transparent deals and keep consumers in the know. And remember, the law's always watching!
- Pricing regulations
- Federal Court of Justice
- European Union (EU)
- Netto
- Competition Center
- Price Indication Directive
- Karlsruhe
- Lawyers
- Recommended retail price (RRP)
[1] "Regulation (EU) 2019/2151 of the European Parliament and of the Council of 27 November 2019 on a framework for the free flow of non-personal data in the European Union," available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019R2151[5] "Handelsgesetzbuch (HGB)" available at: https://www.gesetze-im-internet.de/hgb/
- The Price Indication Directive, governed by the European Union (EU), requires retailers to disclose the lowest price demanded over the previous 30 days (reference price) in every advertisement for a price reduction, as ruled by the European Court of Justice.
- The Federal Court of Justice is currently examining a complaint against food retailer Netto Marken-Discount, raising concerns about misleading advertising regarding the association between the reference price and the current price.
