What is misleading pricing

The price of a good or service is often a good indication of its quality or its availability. Price comparisons can also give you an indication of whether you are getting a good deal or a bargain. When advertising or promoting the price of products or services, traders must not make false or misleading representations.

A trader risks breaching the law if it:

advertises products at a specific price when it does not have a reasonable supply for consumers to purchase
makes inaccurate or misleading price comparisons
represents that an advertised price is the total price that you will have to pay when it is not.

Bait advertising

'Bait advertising' describes the situation when a trader advertises goods at a certain price (usually a 'sale' price) but does not have a reasonable supply. What is a 'reasonable supply' will depend on several things, including the type of product and the way it was promoted or advertised.

If a trader has genuinely underestimated the popularity of a sale product, it may not be considered bait advertising.

For example, an electronics retailer runs a major national campaign advertising 50-inch televisions at a low price of $799 for a week-long sale. The retailer usually sells about 30 televisions of this type every week. The retailer only stocks two televisions at the advertised price and refuses to take customer orders. When customers attempt to buy the television at the advertised price, they are told it is out of stock and offered a more expensive unit for $999. This is likely to be bait advertising as the retailer does not have a reasonable supply of the advertised television.

Comparative pricing

Comparative pricing is a marketing tool used by traders to compare current selling prices to their former or future prices. As with all forms of advertising, any claims made by traders in relation to price must be accurate and must not mislead or deceive you.

The following are types of price comparison practices commonly used by traders.

Was–Now advertising

Products or services advertised with a 'was'–'now' price claim should accurately reflect a comparison between the previous price ('was') and the current price ('now') being offered.

Further, the actual previous price must have been offered for a reasonable period prior to the discount offer commencing so that it is a genuine offer and not just a price that has been inflated to make a sale price seem more attractive.

For example, a retailer must not advertise a jacket for $85 ('now' price) discounted from $100 ('was' price), if that retailer does not normally sell the jacket for $100 or if the jacket has been offered at the higher price for only a short amount of time.

Strike-through pricing

Strike-through pricing is where the higher price of a product is crossed out and a second lower price is offered.

The trader must have offered these goods at the higher price for a reasonable period of time—that is, it must be a genuine pre-sale price.

For example, if a swing tag on a dress has a price of $100 crossed out and a new price of $70 offered, the dress must have been available at that price before the new price was applied and have been offered at that price for a reasonable period of time.

Comparisons with the recommended retail price (RRP)

Advertising or promotions of 'savings' or 'discounts' on the RRP of goods and services are designed to convince you that you are getting a good deal because the price is less than the RRP.

If traders do not normally price their goods at the RRP, it may be misleading to give you the impression that they do.

Component pricing

When advertising or promoting the price of products or services, traders must specify a single total price that you will have to pay. It is unlawful for traders to represent that an advertised price is the total price when it is not.

Check out the ACCC’s pricing webpage for more information on component pricing.

Need help?

If you think that you have been misled, contact the trader first – see how to resolve a problem for help on how to do this.

If you are unable to resolve your complaint with the trader, you can contact the ACCC or your local consumer protection agency for more information on your consumer rights and options. Your local office may also be able to conciliate (help you negotiate with the trader).

Misleading pricing