Launch of retailer's guide to price comparison advertising
A new retail guide for comparison price advertising was launched on 25 February at the ACCC’s Consumer Consultative Committee by ACCC Deputy Chair, Ms Louise Sylvan.
Comparison price savings are a strong marketing tool because everyone likes to get a bargain and so retailers try to gain a competitive edge by selling their goods at a discounted price.
To attract customers through how much savings they are getting, retailers commonly promote the discounted price compared with the normal or most recent price. But care must be exercised when doing so.
Whether the representation is:
Was $X, Now $Y
25% OFF
$Y, SAVE $X
or any other price saving claim, it must accurately reflect a comparison between the most recent price and the current discounted price.
In 2002 the Federal Court convicted and fined Allans Music Group Pty Ltd for false and misleading representations concerning the price of goods. The company had published a catalogue using ‘Was $X, Now $Y’ price claims, but certain goods had not been sold at the ‘Was’ price for several months, or not at all during the previous year. This followed earlier actions initiated by the ACCC regarding misleading price claims, such as against Cue Design Pty Ltd and Nissan Motor Company (Australia) Pty Ltd.
After the Allans Music case the ACCC consulted with peak retailer groups and a guideline was published in poster form to assist retailers to assess whether the price comparisons in their advertising was likely to mislead or deceive consumers. This has now been updated and reformatted.
When a normal price has no basis in fact but has been inflated or merely created from thin air to exaggerate the alleged saving, the retailer is likely to be engaged in misleading or deceptive conduct in breach of the Trade Practices Act.
