Prices displayed by a business must be clear, accurate and not misleading to consumers. You should always display the total price of a product or service. Certain grocery retailers must also display unit pricing on their shelf labels.
When you present prices to your customers, you must state the total price of the good or service as a single figure, which is the minimum total cost that is able to be calculated. This should include any tax, duty, fee, levy or other additional charges (e.g. GST or airport tax). This rule generally does not apply in business-to-business transactions. This means you do not need to include GST if a price statement is made exclusively to businesses.
You do not need to include optional charges or extras or delivery charges – unless you are aware of a minimum delivery charge that must be paid in which case you can chose whether to include it in the total price or as a separate component.
If you promote a price that is only part of the total price, the total price must also be displayed at least as prominently as the part price. This means that customers should be able to identify the total price in the advertisement just as easily as prices for all the other aspects.
Restaurants, cafes & bistros
Restaurants, cafes and bistros that charge a surcharge on certain days do not need to provide a separate menu or price list or have a separate price column with the surcharge factored in. However, the menu must include the words “a surcharge of [percentage] applies on [the specified day or days]” and these words must be displayed at least as prominently as the most prominent price on the menu.
If the menu does not have prices listed, these words must be displayed in a way that is conspicuous and visible to a reader. These measures apply to pricing for both food and beverages.
If you display or advertise in a catalogue the same good with more than one price, you must sell the good for the lowest displayed (or advertised) price or withdraw the goods from sale until the price is corrected. This does not apply when the advertisements state that prices vary in different regions, where a price is entirely hidden by another price, a unit price is shown, or a price is displayed in an overseas currency.
It is illegal for a business to make claims to customers about its goods or services—including claims about price—that are incorrect or likely to create a false impression. This includes advertisements or statements in any media (e.g. print, radio, television or online) and any claim made by a person representing your business.
Intention is irrelevant. You may breach the law even if you thought the statement was correct when you made it.
Businesses often make comparisons between product prices being charged and:
- the company's previous pricing (including 'was/now' or 'strike through' pricing or by specifying a particular dollar amount or percentage saving)
- the 'cost' or wholesale price
- the competitor's price
- the recommended retail price (RRP).
Businesses that use such statements must ensure that consumers are not misled about the savings that may be achieved.
Statements such as 'Was $150/Now $100' or '$150 Now $100' are likely to be misleading if products have not been sold at the specified 'before' or 'strike through' prices in a reasonable period immediately before the sale commences.
Such statements are also likely to be misleading if only a limited proportion of a product's sales were at the higher price in the period immediately before the sale commences. The volume or proportion of sales that may result in such statements being misleading will depend on the circumstances of each case.
The length of the period will depend on factors such as:
- the type of product or market involved
- the usual frequency of price changes.
If a business has a policy or practice of discounting goods when not on sale and uses two-price advertising in relation to sale periods, there is a significant risk that the use of two-price advertising will involve conduct that is misleading. The business would be representing to consumers that they will make a particular saving if they purchase the item during the sale period, when this is not necessarily the case.
Similar considerations apply to the specification of dollar amount or percentage savings such as 60% off.
Comparisons between 'cost/wholesale' and 'sale' prices can be misleading if the specified 'cost/wholesale' price is greater than what the business paid for the goods. Consumers may be more likely to purchase goods if the gap between the wholesale and retail price is perceived to be smaller than what it actually is.
Price comparisons can also be misleading where, for example, a business uses a competitor's price for identical goods, but that price is taken from a different market or geographical location.
Depending on individual circumstances, businesses using statements such as 'savings' or 'discounts' when comparing a sale price to the recommended retail price (RRP) may be misrepresenting potential savings if the product has never been sold at the RRP or the RRP does not reflect a current market price.
Tips for displaying two-price advertising
It is good business practice and fair trading risk management to keep records substantiating any two-price price claim. You may be required to substantiate such a claim to an ACL regulator, including the ACCC.
It is also important to remember that a 'sale' or 'discounted' price should only be available for a limited period. This is because if a reasonable amount of time has elapsed and an item is still 'on sale', the discounted price effectively becomes the new selling price, so it may be misleading or deceptive to continue to call it a 'discount' or 'sale' price.
Businesses can choose whether or not to pass on the cost of accepting credit card payments to their customers. However, if you decide to impose a credit card fee, you must ensure your customers are aware—before they enter into the transaction or contract—that a fee will apply and the amount of the fee.
Certain grocery retailers are required to display unit prices when selling grocery items to consumers.
Check your displayed prices to ensure they are clear, accurate and not misleading to your customers.